Mary company is considering purchasing new carboard baler machines. The purchase would increase their capacity for work and allow them to increase their sales volume by 6%. The machinery would cost the company $16,000 per year. The purchase would also decrease their variable costs per unit by 1%. Find the companys prior year data below when 150,000 units were sold.

Sales	$ 900,000
Variable costs	330,000
Contribution margin	570,000
Fixed costs	481,380
Net income/ (loss)	$ 88,620

What would the impact of the purchase be to the companys break-even point? Will it increase it, decrease it, or have no impact on it? If it does change the break-even point, by how many units?

2. What will the impact be to the companys net income? It is increase it, decrease it, or have no impact on it? If it does impact the break-even point, by how much? Please show your work.

3. Based on your responses to items 1 &2, what do you recommend to the company? Should they go ahead with the purchase of the equipment? Why or why not?

4. Are there any other financial or non-financial items that the company should consider before purchasing the equipment?