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Gertrude Corp. is pondering a factory overhaul that will cost $722889 this year (2021) and disrupt production while the overhaul is occurring. This disruption will

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Gertrude Corp. is pondering a factory overhaul that will cost $722889 this year (2021) and disrupt production while the overhaul is occurring. This disruption will cost the firm $490714 in contribution margin this year. Starting in 2022, Gertrude will benefit from the overhaul by seeing its variable cost per unit fall by 22%. Annual fixed costs will increase for maintenance ($100,000 the first year increasing by $50,000 each year thereafter, so 150,000 in the 2nd year, etc.) and $175643 for depreciation (same every year). Absent an overhaul, the factory produces 2 million units per year at variance cost of $3 per unit, fixed cost of $2.5 million, with the output sold for $5 per unit. After an overhaul, the company would intend to cut the price to $4.60 per unit, enabling the firm to produce and sell 2.3 million units annually. The factory is old and is expected to be shut down at the end of 2025 regardless of the overhaul decision. The factory would then be sold to another firm. Without an overhaul the sale price for the factory would be $2 million. With an overhaul, the sale price for the factory would be $2.3 million. Calculate the appropriate amount to include in an NPV calculation for 2021. (Not the present value, but the amount that would be present valued.) In other words, exclude any effects for other years. Give the answer as a number of S million (round to 3 significant digits). So e.g., 6,444,265 should be written as 6.44, Answer: Calculate the appropriate amount to include in an NPV calculation for 2022. (Not the present value, but the amount that would be present valued.) Give the answer as a number of $ million fround to 3 significant digits). Answer: Calculate the appropriate amount to include in an NPV calculation for 2025. (Not the present value, but the amount that would be present valued.) Give the answer as a number of $ million (round to 3 significant digits). Note that we are skipping two years. Answer: Notwithstanding the answers given above, assume the annual amounts were as follows (including the two years you didn't calcuate): 2021: -0.8 million 2022: 0.54 million 2023: 0.51 million 2024: 0.43 million 2025 0.64 million Assume the cost of capital is 0.16. Calculate the NPV of the overhaul Report it as a number of million (3 significant digits). Answer: Using the numbers provided in the previous question, calculate the NPVI for the overhaul (3 significant digits)

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