Buckingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750. The cost of the XC-750 is $275 milion. Unfortunutely, installing itis machine will take several months and wil partialy disnupt production. The firm has just completed a 550,000 feasiblity study to analyze the decision to buy the XC-750, resulting in the following estimates Marketing Once the XC750 is operatng next year, the extra capacity is expected to generate $10.0 milion per year in additional sales, which will continue for the 10 -year Me of the machine. Operabiont: The disruption caused by the instalation will decrease sales by $5 milion this year (year of. Once the machine is operating next year, the cost of goods for the products produced by the XC-T50 is expected to be 70% of their sale price. The increased production will require additonal inventery on hand of 51.0 millon, to be added in year 0 and depleted in year 10 . Muman Resources. The expansion will require addsonal sales and adininistrative pertonnel at a cost of $2 milion per year Accounting: The XC-750 has a CCA rate of 35% and no salvage value is expected. The fim expects receivables from the new saies to be is\% of revenues and payables are expected to be 10% of the cost of goods sold Buckingham's marginal corperate tax rake is 35%. a. Detemine the incremental earnings (using CCA) trom the purchase of the C750. b. Determine the tree cash flow (including all CCA tax shield effects) from the purchase of the XC-750 for the trat 10 years. (Hint include the impact in year t1.) Determine the incremental earnings (using CCA) from the purchase of the XC-750 for years 0 to 5 : The incremental earnings (including CCA) for year 0 is $. (Round to the nearest dollar.) The incremental earnings (including CCA) for year 1 is $. (Round to the nearest dollar.) The incremental earnings (including CCA) for year 2 is $. (Round to the nearest dollar.) The incremental earnings (including CCA) for year 3 is $. (Round to the nearest dollar.) The incremental earnings (including CCA) for year 4 is $. (Round to the nearest dollar.) The incremental eamings (including CCA) for year 5 is $. (Round to the nearest dollar.) Determine the incremental earnings (using CCA) from the purchase of the XC-750 for years 6 to 10: The incremental eamings (including CCA) for year 6 is $. (Round to the nearest dollar.) The incremental earnings (including CCA) for year 7 is $. (Round to the nearest dollar.) The incremental earnings (including CCA) for year 8 is $. (Round to the nearest dollar.) The incremental earnings (including CCA) for year 9 is $. (Round to the nearest dollar.) The incremental earnings (including CCA) for year 10 is $. (Round to the nearest dollar.) b. Determine the free cash flow from the purchase of the XC-750 for years 0 to 5 : The free cash flow for year 0 is $. (Round to the nearest dollar.) The free cash flow for year 1 is $. (Round to the nearest dollar.) The free cash flow for year 2 is $. (Round to the nearest dollar.) The free cash flow for year 3 is $. (Round to the nearest dollar.) The free cash flow for year 4 is $. (Round to the nearest dollar.) The free cash flow for year 5 is $. (Round to the nearest dollar.) b. Determine the free cash flow from the purchase of the XC-750 for years 0 to 5 : The free cash flow for year 0 is $. (Round to the nearest dollar.) The free cash flow for year 1 is $. (Round to the nearest dollar.) The free cash flow for year 2 is $. (Round to the nearest dollar.) The free cash flow for year 3 is $. (Round to the nearest dollar.) The free cash flow for year 4 is $. (Round to the nearest dollar.) The free cash flow for year 5 is $. (Round to the nearest dollar.) Determine the free cash flow from the purchase of the XC-750 for years 6 to 9 : The free cash flow for year 6 is $. (Round to the nearest dollar.) The free cash flow for year 7 is $. (Round to the nearest dollar.) The free cash flow for year 8 is $. (Round to the nearest dollar.) The free cash flow for year 9 is $. (Round to the nearest dollar.) Determine the free cash flow from the purchase of the XC-750 for year 10: The free cash flow for year 10 is $. (Round to the nearest dollar.) Determine the free cash flow from the purchase of the XC-750 for year 11. The free cash flow for year 11 is $ (Round to the nearest dollar.)