e Problem Ray Summers Company operates at full capacity of 10,460 units per year The company, however, is stll unable to fully meet the demand for its product, estimated at 15,000 units annually. This level of demand is expected to continue for at least another four years To meet the demand, the firm is considering the purchase of new equipment for $580,000. This equipment has an estimated useful life of 4 years, estimated sales (disposal) value of this asset at the end of 4 years is $50,000 (pretax). The engineering division estimates that installing, testing, and training for the use of the equipment will cost $12,000. These costs are to be capitalized as part of the cost of the new equipment. An adjacent vacant warehouse can be leased for the duration of the project for $10,000 per year, which cost would be included as par of fixed manufacturing overhead. The warehouse needs $58,000 of renovations to make it suitable for manufacturing. The renovation cost is to be capitalized as part of the cost of the new equipment. The lease terms call for restoring the warehouse to its original condition at the end of the lease. The restoration is estimated to cost $20,000, a cost that is fully deductible for tax purposes. Current pretax operating profit per unit is as follows: Per Unit Variable costs: s 66 22 s 25 88 Fixed costs: Manufacturing Marketing and adninistrative 15 Operating profit before tax 92 The new equipment would have no effect on the varlable costs per unit All current fixed costs are expected to continue with the same total amount. The per-unit fixed cost incldes depreciation expenses of $5 for manufacturing and $4 for marketing and administration Additiona fred manufacturing costs of S140 000 (excluding cepreciat on on the new equipment) will be incurred each year the equipment is purchased The company must also hire an adclitonal mbrketing manager to serve new customers. The ennual cost for Score answer>