Wisconsin Snowmobile Corporation is considering a switch to level production. Cost efficiencies would occur under level production,

and aftertax costs would decline by $$52,800,$ but inventory would increase by $$440,000.$ Wisconsin Snowmobile would have to

finance the extra inventory at a cost of $13\mathrm{.}5$ 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

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.