Question: AudioCable is currently manufacturing an adaptor that has a variable cost of $0.6 per unit and selling price of $1 per unit. Fixed costs are

AudioCable is currently manufacturing an adaptor that has a variable cost of $0.6 per unit and selling price of $1 per unit. Fixed costs are $14000. Currently sales volume is 35000 units. The firm can improve the product quality by adding a new piece of equipment at an additional cost of $6000. Variable costs increase to $0.7 but sales volume should jump to 50000 units due to the higher quality. Should AudioCable buy the new equipment?

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