Schwieser Satelites inc. produces satelite earth stations that sell for $95,000 each. The firm's fixed costs, 5 , ore $1 million, 50 earth stations are produced and sold each year, profits tocal $400,000, and the firm's assets (all equity finenced) are $5 mision. The firm estimstes that it can change its production process, adding $4 minion to assets and $300,000 to fixed operating costs. This change will reduce variable costs per unit by $12,000 and increase output by 20 units. However, the saies price on all units must be lowered to s90,000 to permit sales of the addational output. The firm has tax loss carryforwards that render its tax rate sero, its cost of equity is 14%, and it uses no debt. a. What is the incremental profit? Enter your answer in dollars. For example, an answer of s4 million should be entered as 4,000,000, not 4 . Round your answer to the nearest dowiac. 1. To get a rough ides of the project's profitabity, what is the prosect's expected rate of return fer the next year (defined as the incremental proft tivided by the inveatment)? lound your answer to two decimal places. Should the firm make the inveitment? sinch the project's expected rate of return for the next year the cost of equity. b. Would the firm's break-even point increase or decrease if it made the change? The chanos would the break-even point, c. Worla the new situation expose the firm to more or less butuness nisk than the old one? I. It is impossibie to state unequivocaly whether the new situation woudd have enore of less buscess risk than the did one. 11. The new situation would obviously hive more butiness risk than the old one. III. The new stuation mould obvioutly hive lest butinest rink than the old one