Globex Corporation projects sales of 100000 units next year at an average price of $50 per unit. Variable costs are estimated at 40% of revenue, and fixed costs will be $2.4 million. Globex has $1 million in bonds outstanding on which it pays 7.5%, and its marginal tax rate is 36%. There are 100000 shares of stock outstanding which trade at their book value of $30.

Globex intends to purchase a machine that will result in a major improvement in product quality along with a small increase in manufacturing efficiency. The machine will cost $1 million, which will be borrowed at 9%. The quality improvement is expected to have a significant impact on Globex's competitive position. Indeed, management expects sales to increase by 5% in spite of a planned 10% price increase. The efficiency improvement combined with the price increase will result in variable costs of 36% of revenue. Fixed cost, however, will rise by 19%. Calculate Globex's DFL and DTL before and after the acquisition of the new machine. Do not round intermediate calculations. Round your answers to two decimal places.

Without machine With machine

DFL

DTL