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Beacon Company is considering automating its production facility. The initial investment in automation would be $ 9 . 0 0 million, and the equipment has

Beacon Company is considering automating its production facility. The initial investment in automation would be $9.00 million, and the equipment has a useful life of 7 years with a residual value of $1,090,000. The company will use straight-line depreciation. Beacon could expect a production increase of 31,000 units per year and a reduction of 20 percent in the labor cost per unit.
Production and sales volume Current (no automation)74,000 units Proposed (automation)105,000 units
Per Unit Total Per Unit Total
Sales revenue $ 95 $ ?question mark $ 95 $ ?question mark
Variable costs
Direct materials $ 19 $ 19
Direct labor 15?question mark
Variable manufacturing overhead 1010
Total variable manufacturing costs 44?question mark
Contribution margin $ 51?question mark $ 54?question mark
Fixed manufacturing costs 1,140,0002,180,000
Net operating income ?question mark ?question mark
Required:
4. Using a discount rate of 14 percent, calculate the net present value (NPV) of the proposed investment. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.)
Note: Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Enter the answer in whole dollars.

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