a. Determine the incremental earnings from the purchase of the XC-750. Calculate the incremental earnings from the purchase of the XC-750 below (with vs. without XC?750): (Round to the nearest dollar.) Incremental Effects Year 0 1-10 Sales Revenues Cost of Goods Sold $ $ S, G, and A Expenses S $ Depreciation $ $ EBIT Taxes at 35% Unlevered Net Income $ $ $ b. Determine the free cash flow from the purchase of the XC-750. Calculate the free cash flow from the purchase of the XC-750 below (with vs. without XC?750): (Note: the change in net working capital for year 0 is equal to the sum of the change in accounts receivable due to the decrease in sales, the change in inventory due to the increase in inventory starting in year 0, and the change in accounts payable due to the decrease in cost of goods sold.) (Round to the nearest dollar.) Incremental Effects Year 0 1 2-9 10 11 Unlevered Net Income $ $ $ Depreciation $ $ Capital Expenditures $ $ Change on Net Working Capital $ $ $ $ Free cash flow $ $ $ $ $ c. If the appropriate cost of capital for the expansion is 10.1%, compute the NPV of the purchase. The NPV of the purchase is $. (Round to the nearest dollar.) d. While the expected new sales will be $10.15 million per year from the expansion, estimates range from $8.10 million to $12.20 million. What is the NPV in the worst case? In the best case? The NPV of the purchase for sales of $8.10 million is $ (Round to the nearest dollar.) The NPV of the purchase for sales of $12.20 million is $ (Round to the nearest dollar.) e. What is the break-even level of new sales from the expansion? The break-even level of new sales from the expansion is $ (Round to the nearest dollar.) What is the breakeven level for the cost of goods sold? The breakeven level for the cost of goods sold is % of sales. (Round to two decimal places.) f. Billingham could instead purchase the XC-900, which offers even greater capacity. The cost of the XC-900 is $4.08 million. The extra capacity would not be useful in the first two years of operation, but would allow for additional sales in years 3 through 10. What level of additional sales (above the $10.15 million expected for the XC-750) per year in those years would justify purchasing the larger machine? The additional sales would need to be $. (Round to the nearest dollar.)