When M. Ding L. Berry, president and chief executive of Berry, Inc., first saw the company and product Vis Contribution Margin income statement below, he flew into his usual rage: Product V is losing the company too much money! I want to see more investment options" Company Product Total V Sales $250,000 $75,000 Variable Expenses 119,000 35,000 Contribution Margin 131,000 40,000 Fored Product Expenses 95,000 37,000 Fixed General overhead 32,900 10,500 Operating Income (loss) $100 (57,500) Tae Fired Product expenses could be eliminated if the product lines to which they are traced were discontinued. Required: 5 marks a) If Product V is dropped, compute the effect of the company's Operating Income Hint-use a Segmented Mazgin Statement. Would you recommend that product V be dropped? Explain your answer bl you have researched purchasing equipment to produce Product 2 The initial investment in equipment 1s5100,000 and its annual net cash flow in is expected to be $25,000/year over the life of the equipment. The equipment is expected to last years with no salvage value. However, we will be able to trade in some old equipment for $5,000 when we purchase the new equipment. 1) Calculate the Payback Period it the company wanted a payback period of at least 5 years, would you buy the equipment? 170 Calculate Simple Rate of Return? If the company wanted a return of 15%, would you invest in the equipment