17 Ever Company is considering switching from level production to seasonal production in order to lower very high inventory costs. Average inventory levels would decline by P300,000 but production costs would rise about P40,000 because of additional startups and other inefficiencies. The firm's cost of financing inventory balances is 15%. A. Should the firm switch to seasonal production? (ignore income taxes) B. At what interest rate woud the cost of financing addtiona inventory under level production be equal to the added production costs of seasonal production?(ignore income taxes) C. Answer (A) and (B) if the applicable income tax rate is 40 percent. 17 Ever Company is considering switching from level production to seasonal production in order to lower very high inventory costs. Average inventory levels would decline by P300,000 but production costs would rise about P40,000 because of additional startups and other inefficiencies. The firm's cost of financing inventory balances is 15%. A. Should the firm switch to seasonal production? (ignore income taxes) B. At what interest rate woud the cost of financing addtiona inventory under level production be equal to the added production costs of seasonal production?(ignore income taxes) C. Answer (A) and (B) if the applicable income tax rate is 40 percent