Sun Microsystems, is a manufacturer of mid-size computers, which are primarily used by medium and small businesses. Sun Microsystems's product line currently consists of three models of mid-size computers. The following data are available regarding the models: Model Selling Price Variable Cost Demand/Year Per Computer Per Computer (Units) SMX-1 $1,600 $1,100 2.000 SMX-2 $2,400 $1,300 1,000 SMX-3 $2,900 $1,400 500 I Sun Microsystems is considering the addition of a fourth model to its line of mid- size computers. This model, the SMX-4 would be sold for $3,500. The variable cost of this unit is $2,600. The demand for the new Model SMX4 is estimated to be 600 units per year. Sixty percent of these unit sales of the new model are expected to come from other models already being manufactured by Sun Microsystems (Sixty percent of the cannibalized amount from Model SMX-1, ten percent from Model SMX-2, and thirty percent from Model SMX-3.) Sun Microsystems will incur a fixed cost of $200,000 to add the new model SMX-4 to its product line. The president of Sun Microsystems will only fund projects which show a positive cash flow by the end of the first year of the project. Based on the above data should Sun Microsystems add the new Model SMX-4 to its line of mid- size computers? Why? [Show Work]