Dan Dion, majority stockholder and president of Dixon, Inc., is working with his top managers on ture plans for the company. As the company's managerial accountant, you've been asked to analyze the following stones and make recommendations to the management team Read the requirements Requirement 3. Dision Calso produced to product lines. Because the division can sell all of the product it can produce, Dion is expanding the plant and needs to decide which product line to emphaska. To make the dechion. the division accountant assembled the following data Click the icon to view the Division product data) Allut expansion, the factory will have a production capachy of 4.500 machine hours per month The plant can manufacture other 20 units of K7076 1 5 units of 6582s per machine how 3a. Identify the constraining factor for Division Division C's constraining factor is machine hours 3b. Prepare an analysis to show which product line to emphasize K707 G582 Contribution mangin per i Data Table Per Unit K707 G582 Sales price S 40 80 S 29 Variable costs 24 CA 51 S 16 Contribution margin Contribution margin ratio 63.8% 40% Print Done 3. Division C also produces two product lines. Because the division can sell all of the product it can produce, Dixon is expanding the plant and needs to decide which product line to emphasize. To make this decision, the division accountant assembled the following data: E (Click the icon to view the Division C product data) After expansion, the factory will have a production capacity of 4,500 machine hours per month. The plant can manufacture either 28 units of K707s or 54 units of G582s per machine hour. a. Identify the constraining factor for Division C. b. Prepare an analysis to show which product line to emphasize. 4. Division D is considering two possible expansion plans. Plan A would expand a current product line at a cost of $8,410,000. Expected annual net cash inflows are $1,500,000, with zero residual value at the end of 10 years. Under Plan B, Division D would begin producing a new product at a cost of $8,150,000. This plan is expected to generate net cash inflows of $1,090,000 per year for 10 years, the estimated useful life of the product line. Estimated residual value for Plan B is $1,000,000. Division D uses straight-line depreciation and requires an annual return of 8%. a. Compute the payback, the ARR, the NPV, and the profitability index for both plans. b. Compute the estimated IRR of Plan A. C. Use Excel to verify the NPV calculations in Requirement 4(a) and the actual IRR for the two plans Print Done * Requirements . X produce, DIXOTTIS expanding the part and needs to decide which proucture to emphasize. To make this decision, the division accountant assembled the following data: Click the icon to view the Division C product data.) After expansion, the factory will have a production capacity of 4,500 machine hours per month. The plant can manufacture either 28 units of K707s or 54 units of G582s per machine hour. a. Identify the constraining factor for Division C. b. Prepare an analysis to show which product line to emphasize. 4. Division D is considering two possible expansion plans. Plan A would expand a current product line at a cost of $8,410,000. Expected annual net cash inflows are $1,500,000, with zero residual value at the end of 10 years. Under Plan B, Division D would begin producing a new product at a cost of $8,150,000. This plan is expected to generate net cash inflows of $1,090,000 per year for 10 years, the estimated useful life of the product line. Estimated residual value for Plan B is $1,000,000. Division D uses straight-line depreciation and requires an annual return of 8% a. Compute the payback, the ARR, the NPV and the profitability index for both plans. b. Compute the estimated IRR of Plan A c. Use Excel to verify the NPV calculations in Requirement 4(a) and the actual IRR for the two plans. How does the IRR of each plan compare with the company's required rate of return? d. Division D must rank the plans and make a recommendation to Dixon's top management team for the best plan. Which expansion plan should Division D choose? Why? Print Done