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Forrester Company is considering buying new equipment that would increase monthly fixed costs from $250,000 to $280,000 and would decrease the current variable costs of

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Forrester Company is considering buying new equipment that would increase monthly fixed costs from $250,000 to $280,000 and would decrease the current variable costs of $75 by $10 per unit. The selling price of $130 is not expected to change. Forrester's current break-even sales are $530,000 and current break-even units are 10,500. If Forrester purchases this new equipment, the revised contribution margin ratio would be: 50% 75% 10% 40% 65%

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