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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-750. The cost of the XC-750 is $2.75 million. Unfortunately, installing this machine will take several months and will partially disrupt production. The firm has just completed a $50,000 feasibility study to analyze the decision to buy the XC-750, resulting in the following estimates:
Billingham could instead purchase the XC-900, which offers even greater capacity. The cost of the XC-900 is $4 million. The extra capacity would not be useful in the first two years of operation, but would allow for additional sales in years 310. What level of additional sales (above the $10 million expected for the XC-750) per year in those years would justify purchasing the larger machine?

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