This is a follow up question from the assignment:

A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives, A and $B,$ have been identified, and the associated costs and revenues have been estimated. Annual fixed costs would be $$40,000$ for A and $$30,000$ for B; variable costs per unit would be $$10$ for A and $$11$ for $B$; and revenue per unit would be $$15.$ Suppose the expected annual demand is $12,000$ units, which statement is true?

Alternative A would yield more profit

Both A and $B$ would yield equal profit

Both A and $B$ would yield a loss

Alternative $B$ would yield more profit