(Algo) Making utomation Decisi [LO 11-1, 11-2, [The following information applies to the questions displayed below.] Beacon Company is considering automating its production facility. The initial investment in automation would be $7.85 million, and the equipment has a useful life of 6 years with a residual value of $1,130,000. The company will use straight- line depreciation. Beacon could expect a production increase of 40,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) 88,000 units Per Unit Total $ 92 $ 2 Proposed (automation) 128,000 units Per Unit Total $ 92 $ ? Production and sales volume Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing costs Contribution margin Fixed manufacturing costs Net operating income $ 16 25 10 51 $ 41 $ 16 ? 10 ? $ 46 ? $ 1,210,000 ? $ 2,160,000 2 A11-2 Part 4 . Using a discount rate of 13 percent, calculate the net present value (NPV) of the proposed investment. (Future Value of $1. Present alue of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Negative mount should be indicated by a minus sign. Enter the answer in whole dollars.) Net present value