The Generic Publications Textbook Company sells all of its books for $100 per book, and it currently costs $50 in variable costs to produce each text. The fixed costs, which include depreciation and amortization for the firm, are currently $2 million per year. The firm is considering changing its production technology, which will increase the fixed costs for the firm by 51 percent but decrease the variable costs per unit by 51 percent. If the firm expects to sell 45000 books next year, should the firm switch technologies? (Round answers to nearest whole dollar,e.g. 5,275.)
The current EBIT for the firm is $
If the firm changes technology, the firm’s new EBIT will be $ .
The firm should the new technologies.