Billingham Padkaging is considering expanding its production capacty by purchasing a new machine, the XC-750. The cost of the XC-750 is $2.83 milion. Untortunalely, instaling this machine will take several months and will partialy disupt production. The fim has just comploted a $45,000 foasiblly study lo analyre the decision to bey the XC-750, resiting in the following estimates: - Operabions: The disupbion cauned by the installation will decrease sales by 4.96 milion this year. As with Bilinghan's existing products, the cost of goods for the products produced by the XC-750 is expectiod to be 73% of their sale price. The increased production will abo requie intreased inventory on hand of $1.11 milion during the ke of the project, including year 0. - Human Resources: The expansion will require addisional sales and administrative personnel at a cost of $1,92 million per year. - Accounting The XC-750 will be depreciated va the strigha-ine mothod over the 10 year life of the machine. The firm expects receivabies from the new sales to be 15% of revenues and payables b be 11% of the cost of goods sold. Eilinghamis marginal corporate tax rate is 21% a. Determine the incremental earnings trom the purchase of the XC-750. b. Determine the tree cath flow from the purchase of the XC-750 c. If the appropriate cost of captal for the expansion is 9.85 , compute the NPV of the purchase. d. While the expected new sales will be $10.15 millon per year from the expansion, estimates range from $8.05 milion to $12.25 million. What is the NPV in the wont case? in the best case? e. What is the break-even level of new sales from the exoansion? What is the breakeven level for the cost ooods sold? a. Determine the hcremental earnings from the purchase of the XC-750. Calculate the incremental eamings from the purchase of the XC-750 below (with vs, whout XCM 50): (Round to the nearest doliar) Incremental Effects (with va. without Xc-750)