Billingham Packaging is considering expanding its production capacily by purchasing a new machine. the XC-750. The cost of the XC-750 is $276 millon Unfortunately, installing this machine will take several months and will partially disrupt production. The firm has just completed a 545,000 feasiblity study to analyze the decision to buy the XC 750 . resulting in the following estimates - Marketing. Once the XC-750 is operational next year, the exira capacity is expected to generato 51000 million per year in additional sales, which wil continue for the 10 year lifo of the machine. - Operabions The disruption caused by the instalation will decrease sales by 55.04 million this year As wilh Billingham's existing products, the cost of goods for the products produced by the XC750 is expected to be 75% of their sale price. The increased production will alse require increased inventory on hand of $1.01million during the life of the project including year 0 . - Human Resources. The expansion will require additonal sales and administrative persannel at a cost of 51.44 milion per year - Accounthg The XC-750 will be depreciated via the straight -line method over the 10-year life of the machine The firm oxpects receivables from the new sales to be 15\%, of revenues and payables to be 10% of the cost of goods sold Bilinghani's marginal comorite tax rate is 21.% a. Determine the incremental earnings from the purchase of the XC-750 b. Determine the free cash flow from the purchase of the XC750 c. If the aborooriate cost of caotal for the exoansion is 102% combute the NPV of the burchase a. Deternine the incremental earnings from the purchase of the XC750 Caiculate the incrementat eamings froen the purchase of the XC750 bolow (with ys. without XCP750) (Round to the nearest dollar) Incremental Effects (with vs. without XC. 750) Sales Revenues Cost of Goods Sold S,G, and A Expenses Depreciation EBIT Taxes at 21% Unlevered Net Income