Part $2$

Child's Play has been approached by the government, which is seeking to buy $75,000$ rattles for its day care centers in $2025.$ The proposed government contract states that the government would pay Child's Play a price of $$7\mathrm{.}50$ per rattle. If Child's Play decides to accept this special order, they would avoid packaging costs for this contract as well as all variable selling and administrative costs. The company's capacity is limited to only $150,000$ units. If they accept the government contract, they will need to increase their capacity by renting an additional machine. Refer to the "Instructions" tab for the company's estimated cost data and additional machine rental cost.

$\backslash$table$[[,,],[$# of Rattles Needed by Gov.,$75,000,],[$Sales Price Paid by Gov.,$$7\mathrm{.}50,$per rattle$],[,,],[$Increase in fixed costs from additional machine,$$20,000,$per machine$]]$

Assume that Child's Play does not adopt the proposed Marketing Plan and that the company's production and sales level without the government contract is expected to be $100,000$ rattles for $2025.$

What is the increase or $($decrease$)$ in Net Income that Child's Play would recognize if they accept this special order?

Based on your above analysis, should Child's Play accept or reject the government contract?