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An electronics firm is currently manufacturing an item that has a variable cost of . 5 5 per unit and a selling price of 1

An electronics firm is currently manufacturing an item that has a variable cost of .55 per unit and a selling price of 1.15 per unit. Fixed costs are $14000. Current volume is 30000 units. The firm can substantially improve the product quality by adding a new piece of equipment at an additional fixed cost of $5600. Variable cost would increase to $.60 and the selling price would be revised to $1.35 with the expectation that the volume would be 50000 units as a result of a higher-quality product. Part 2 If the firm does not add new equipment, its profit will be=4000 dollars (round your response to the nearest whole number and include a minus sign if the profit is negative). Part 3 If the firm does add new equipment, its profit will be=7900 dollars (round your response to the nearest whole number and include a minus sign if the profit is negative).

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