BUAD 2050: Spring 2018: Due on 3/19/2018 at the beginning of class 11. Chappy manufactures two lines of pants: Stripe and Plaid. Last year, the Stripe line sold 25,000 and the Plaid sold 32,000. Chappy is considering to eliminate the Stripe line based on the financial statement listed below Plain $400,000 Upscale $900,000 Sales Less: COGS Unit level _Deprecationproductionequipment Gross Margin Less: operating expenses: 320,000 120,000 460,000 80000 100,000 Unit level SG&A Corporate(facility levelfixed cost) Net income (loss) 130,000 60,000 $270,000 80,000 60,000 40 Should Chappy eliminate the Stripe slacks line? Explain your answer: 12. Tommy has been using the same machines to make its name brand clothing for the last five years. A cost efficiency consultant has suggested that production costs may be reduced by purchasing more technologically advanced machinery. The old machines cost the company $100,000. The old machines presently have a book value of $50.000 and a market value of $10,000. They are expected to have an eight-year remaining life and $1,000 salvage value. The new machines would cost the company $50,000 and have operating expenses of $9,000 a year. The new machines are expected to have an eight-year useful life and $5,000 salvage value. The operating expenses associated with the old machines are S15,000 a year. Should Tommy keep or replace the machine, and how would that decision impact profitability