Arrow Products typically earns a contribution margin ratio of $32$ percent and has current fixed costs of $$1,640,000.$ Arrow's general manager is considering spending an additional $$100,000$ per year to do one of the following:

Start a new ad campaign that is expected to increase sales revenue by $4$ percent.

License a new computerized ordering system that is expected to increase Arrow's contribution margin ratio to $36$ percent.

Sales revenue for the coming year was initially forecast to equal $$6,400,000($that is$,$ without implementing either of the above options$).$

A$.$ Compute the projected operating income for each option? For each option, how much will projected operating income increase or decrease relative to initial predictions?

B$.$ By what percentage would sales revenue need to increase above the current level of $$6,400,000$ to make the ad campaign as attractive as the ordering system?N