Schweser Satellites Inc. produces satellite earth stations that sell for $100,000 each. The firms fixedcosts, F, are $2 million, 50 earth stations are produced and sold each year, profits total $500,000, and thefirms assets (all equity financed) are $5 million. The firm estimates that it can change its productionprocess, adding $4 million to investment and $500,000 to fixed operating costs. This change will (1)reduce variable costs per unit by $10,000 and (2) increase output by 20 units, but (3) the sales price onall units will have to be lowered to $95,000 to permit sales of the additional output. The firm has tax losscarryforwards that render its tax rate zero, its cost of equity is 16%, and it uses no debt.3. What is the incremental profit? To get a rough idea of the projects profitability, what is theprojects expected rate of return for the next year (defined as the incremental profit divided by theinvestment)? Should the firm make the investment? Why or why not?