Belingham Padkaging is considering expanding its production capsoty by puchasing a new machine, the XC-750. The cost of the XC-750 is $2.74 minion. Unfortunstely, instaling this machine wil take several monith and will partialy disupt production. The firm has just completed a $50,000 feasiolity study to analyze the decision to buy tho XC-750, resultung in the following estimates: - Marheting Once the XC-750 is operational next yoar, the extra capacity is expected to generalo 510.00 million per year in additional sales, which will continuo for the 10 -yaar iffe of ithe machine. - Operations: The disruption caused by the installation wil decrease sales by $4.94 millon this year. As with Bilingharm's existing producta, the cost of goods for the products produced by the XC.750 is expected to be 70% of their sale price. The incrosod production will also require increased inventory on hand of $1.13 milion during the life of the proplect, induding year 0 . - Human Resources. The expansion wil require additional sales and administrative personnel at a cost of $2.04 milion per year. - Accounting. The XC-750 will be deprecintod via the straight: Ine method over the 10-year leo of the machine. The firm expects teceivables from the new sales to be 16% of raverues and payables to be 95 of the cost cl goods sold Bilingharris marginal corporate tax rate is 30%. a. Determine the incremental earnings from the purchaso of the XC- 750 . b. Determine the froe cash flow from the purchase of the XC-750 c. If the appropriate cost of copital for the expansion is 10:2%, compute the NPV of the purchase d. Whilo the expoctod now sales wil be $10.00 milion per year ficrn the exparsion, estimates rarge from $8.05 millon fo $1195 milion. What is the NFV in the worst case? in the best case? e. What is the break-even level of new sales from the expansion? What is the broakemen lovel for the cost of govos sold? a. Dotemine the incremental earnings fiom the purchase of the XC-750