IKEA sells 12,000 units of its product per year. The selling price per unit is $100, and the unit variable costs is $75. IKEAs manager is considering to lease a new machine for $147,000 per year, which allows IKEA to make modifications to the product. After modifications, the unit variable costs will increase by $20.00, but IKEA's manager is hoping to sell the modified product for $130 per unit. a-1. Should IKEA modify the units or sell them as is?

multiple choice

A.) Sell as is

B.) Sell with modifications

a-2. How much will the decision affect profit? (Use absolute value.)

b. What is the least price IKEA should charge for the modified product (per unit) to make modification worthwhile? (Round your answer to 2 decimal places.)

c. The leasing company allows for negotiation. What is the most price IKEA would be willing to pay to lease the machine if IKEA plans to charge $130 per unit for the modified product?