The following static budget is provided: units 23,000 units sales $ 230,000 less variable costs: manufacturing costs $ 80,500 selling and administrative costs $ 55,200 contribution margin $ 94,300 less fixed costs: manufacturing costs $ 32,200 selling and administrative costs $ 17,250 net income $ 44,850 what will budgeted net income equal if 21,000 units are produced and sold?

The common stock and debt of northern sludge are valued at $65 million and $35 million, respectively. investors currently require a return of 15.9% on the common stock and a return of 7.8% on the debt. if northern sludge issues an additional $14 million of common stock and uses this money to retire debt, what happens to the expected return on the stock? assume that the change in capital structure does not affect the interest rate on northern’s debt and that there are no taxes.