Question 2. The popularity of electric cars has made Lincoln Cars Plc rethink its strategy. They currently produce and sell 100 non-electric cars per month. The variable cost of production per car is 10,000. They also pay annually, staff salaries to the tune of 50,000, in addition to the utility bill of 15,000 and insurance of 50,000. The sales price for non-electric cars is 25,000 each. The company is planning to switch production to electric cars. The company will produce cars at a variable cost of 6,000 per electric car. Fixed expenses will increase to 175,000 in total to deal with new technology and cover other previous expenses. Electric cars will be priced at 28,000 each. Sales are likely to remain unchanged, but management would like to estimate how any change might affect its position. Required: a) Advise the business of the change in the break-even point (sales and number) should they adopt the strategy. (5 marks) b) What is the profit (or loss) in both scenarios? (5 marks) c) Discuss the concept of fixed costs and how they relate to total revenue and BEP. Support your work with a graph (this is not related to the above scenario. Word limit- less than 150 words). (5 marks) d) Give two examples of economic risk in the context of the car industry. [Word limit- less than 150 words] (5 marks) TOTAL: 20 marks