Requirements:

1)please use sensitivity analysis to prepare a business recommendation.

2) please show your work

Hints:

• The new break-even point in units should be 135,000.
• The new net income should be $44,550.

EA7. LO 3.3 Flanders Manufacturing is considering purchasing a new machine that will reduce variable costs per part produced by $0.15. The machine will increase fixed costs by $18,250 per year. The information they will use to consider these changes is shown here. Current Units sold Sales price per unit Variable cost per unit Contribution margin per unit Fixed costs Break-even (in units) Break-even (in dollars) Sales Variable costs Contribution margin Fixed costs Net income (loss) 216,000 $ 2.15 $ 1.75 $ 0.40 $ 56,000 140,000 $301,000 $464,400 $378,000 $ 86,400 $ 56,000 $ 30,400 A. What will the impact be on the break-even point if Flanders purchases the new machinery? B. What will the impact be on net operating income if Flanders purchases the new machinery? C. What would your recommendation be to Flanders regarding this purchase