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Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC - 7 5 0 . The cost of the XC
Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC The cost of the XC is $ million.
Unfortunately, installing this machine will take several months and will partially disrupt production.
The firm has just completed a $ feasibility study to analyze the decision to buy the XC resulting in the following estimates:
Marketing: Once the XC is operating next year, the extra capacity is expected to generate $ million per year in additional sales, which will continue for the year life of the machine.
The increased production will require additional inventory on hand of $ million to be added in year and depleted in year
Human Resources: The expansion will require additional sales and administrative personnel at a cost of $ million per year.
Billingham's marginal corporate tax rate is
Determine the incremental earnings from the purchase of the XC and fill in the table:
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