Question: The electronics firm in Problem 1-20 is now considering purchasing the new equipment and increasing the selling price of its product to $1.20 per unit.

The electronics firm in Problem 1-20 is now considering purchasing the new equipment and increasing the selling price of its product to $1.20 per unit. Even with the price increase, the new volume is expected to be 50,000 units. Under these circumstances, should the company purchase the new equipment and increase the selling price?

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