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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 $20,800, but
Wisconsin Snowmobile Corp. is considering a switch to level production. Cost efficiencies would occur under level production, and aftertax costs would decline by $20,800, but inventory would increase by $260,000. Wisconsin Snowmobile would have to finance the extra inventory at a cost of 9.5 percent. a-1. Determine the extra cost or savings of switching over to level production. a-2. Should the company go ahead and switch to level production? Yes b. How low would interest rates need to fall before level production would be feasible? (Input your answer as a percent rounded to the nearest whole number.) Interest rate %
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