ACT is thinking about installing digital projection equipment. This type of advanced technology would help the theatre differentiate itself from its competitors. This projection equipment would allow the theatre to offer a premium movie viewing experience to its audience and show 3D movies, meaning higher ticket prices. Also, the new equipment would raise variable acquisition costs. However, the equipment would increase fixed costs by $350,000, which represent one time purchase and installation costs. This alternative is exclusive of alternative 1 -so use the original financial information from page 1 (also shown below) to calculate the effects of the new equipment. Sales $ 960,000 Variable costs 640,000 Contribution margin 320,000 Fixed costs 140,000 Income before taxes 180,000 Income taxes (32% rate) 57,600 Net income $ 122,400 Additional Information: This alternative would allow ACT to increase their ticket prices to $17.50 and would increase the variable cost per unit by $1.50. Assume ticket sales remain at 80,000. 8.) If sales greatly increase, which type of theatre would experience a greater increase in profit (discount or 3D)? What if ticket sales declined -which theatre would experience a greater loss or reduction in income? Explain why. How does your calculation from (4) support your point? 9.) Are there any monetary or non-monetary advantages of installing this superior equipment? 10. Since no advertising budget is available under this alternative, what are some creative and low-cost methods the company could employ to help advertise the change to their theatre? 11.)Compute the Profit Margin and Return on Assets assuming average total assets of $2,500,000. Industry averages are 12% and 5% respectively