Buckingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750. The cost of the XC-750 is $3.00 milion. Unfortunately, instaking Osis machine wall tate soveral months and wit partiafly disrupt production. The fim has just completed a $50.000 fessibitify study to analyze the decisien to byy the XC-750, resulting in the following estimutes: Marketing Once the XC-750 is operating next year, the extra capacily is expected to generate $12.0 million per year in adstonal sales, which will contenue for the 10 -year ife of the machine. Operatons: The disruption caused by the instaltation witi decrease sales by $5 milion this year (year 0 ). Once the machine is sperating next year, the cost of goods for the prodvicts prodiced by the XC.750 is expected to be 70% of their sale price. The increased production will require additional inventory on hand of $1.5milion, to to adsed in year 0 and deplited in year 10 . Human Resources: The expansion wil require addetional sabs and administrative penonnel af a cost of $2 milion per year Accounting: The XC-750 has a CCA rate of 30% and no sulvage value is expected The frm expects receivables from the now sales to be 12% of revenues and parables are expected to be 10% of the cost of goods sold. Buckingham's marginal corporate lax rate is 26%. a. Determine the incremental earnings (using CCA) from the purchase of the XC-750. a. Determine the incremental eamings (using CCA) from the purchase of the XC-750 for years o to 5 : The inchementas earnings (unctuding CCA) for year 0 is $ The incremental earnings (including CCA ) foe year 1 is $ The incremental earnings (including CCA) for yeur 2 is 8 The incremental eamings (noctuding CCA ) bor year 3 is $ The incremental eamings (including CCA) for year 4 is $ The incremental saminge (including CCA) for year 5 is s (Round to the newrest dollar.) (Round to the nearest dollar) (Reund to the nearent dollar) (Round to the noarest doliar.) (Round to the nearest dollar) (Hound 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.) 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.)