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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 $36,000, but

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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 $36,000, but inventory costs would increase by $300,000 Wisconsin Snowmobile would have to finance the extra inventory at a cost of 13.5 percent. a. Should the company go ahead and switch to level production? b. How low would interest rates need to fall before level production would be feasible? Solution Problem 7-16 Instructions Enter formulas to complete the requirements of th a. Should the company go ahead and switch to level production? b. How low would interest rates need to fall before level production would be feasible? Interest rates would need to fall to: or less for the switch to be feasible

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