Lourdes Production Corporation (LPC) manufactures medical scales for doctors' offices. LPC projects sales of 100,000 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. LPC has $1 million in bonds outstanding on which it pays 7.5%, and its marginal tax rate is 36%. There are 100,000 shares of stock outstanding which trade at their book value of $30.

LPC 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 LPC'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 LPC'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