Kendras Quilts makes custom baby quilts embroidered with the babys name and date of birth. The company is considering the purchase of a new embroidery machine that costs $75,000. The increased efficiency of the new machine would allow the company to increase revenue by 50%, from $250,000 to $375,000 annually. Direct labor costs would increase by $15,000, and fixed costs (not including depreciation on the machine) would increase by $12,500. Factory rent is $12,000 per year. Should the company purchase the machine?

• A : Yes, because profit would increase by $10,500.

  B : Yes, because profit would increase by $22,500.

• C : No, because profit would decrease by $10,000.

• D : No, because profit would decrease by $17,500.