Wisconsin Snowmobile Corporation is considering a switch to level production. Cost efficiencies would occur under level production, and aftertax costs would decline by $$36,000,$ but inventory would increase by $$360,000.$ Wisconsin Snowmobile would have to finance the extra inventory at a cost of $11$ 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

No

b$.$ How low would interest rates need to fall before level production would be feasible?

Note: Input your answer as a percent rounded to the nearest whole number.

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