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Wisconsin Snowmobile Corp. is considering a switch to level production. Cost efficiencies would occur under level production, and aftertax costs would decline by $23,100, but
Wisconsin Snowmobile Corp. is considering a switch to level production. Cost efficiencies would occur under level production, and aftertax costs would decline by $23,100, but inventory costs would increase by $330,000. Wisconsin Snowmobile would have to finance the extra inventory at a cost of 8.0 percent. (a-1) Determine the extra cost or savings of switch over to level production. (Input the amount as positive value. Omit the "$" sign in your response.) $ (a-2) Should the company go ahead and switch to level production? No Yes (b) How low would interest rates need to fall before level production would be feasible? (Omit the "%" sign in your response.) Interest rate %
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