I need help answering the last two questions; please explain each part.

Homework: Homework-Chap 9 Save Score: 3.73 of 4 pts 21 of 25 (25 complete) HW Score: 98.4%, 98.4 of 100 pts P 9-33 (similar to) E Question Help Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC 750. The cost of the XC- 750 is $2.68 million. Unfortunately, installing this machine will take several months and wi partially disrupt production. The firrn has just complcted a 546,000 feasibility study to analyze the decision to buy the XC-750, resulting in the [ellowing estimales Marketing Once the XC-50 is operational next year, the extra capacity is expected to generate $10.10 million per year in additonsl sales, which will contnue tor the 10-year lite ot the machine per ons The den tion caused by the instal a n will decrease sales $5 5 m on this ear As with Rdlingha s existing products increased produclion will also require increased inventory on hand of $1.11 million during the life of the projet, including year 0 e c st goods or he products produced by me X 750 s expected 1 70% of their sale pri e The Human Resources The expansion will require additional sales and acmin strative personnel at a cost at 51.98 million per yea A oum ng The C-750 ill be depreciated a the str htli e metod over the 10-year life of the machin The firm expects re ables from the ne sais to be 15% of revenue and payable to be 11% ofthe cost of goods sold Billingham's mar al corporate tax rate is 35% a. Determine the incremental eamings trom the purchase ot the XC-50 b. Determine the free cash flow from the purchase of the XC 750 c. If the appropriate cost of capital for lhe expansion is 10 5%, compute the NPVof the purchase. d. While the expected new sales Wl be $10 10 million per year trom the expansion, estimates range trom $8 20 miian to $12 0 million What is the NPV in the worst case? In the best case? e. What is the break even level of new sales from the expansion? What is the breakeven level for the cost of gcods sold? f. Bilinaham could inslead vurcase the XC-900. which offers even urealer capacily The cosl of the XC-900 is $3.92 mllion. The extra cavacilw would nol be useful in Uhe first two vears cf operatio bul would allow for additional sales in vears 3 throuuh 10 a. Determine the incremental eanings from the purchase of the XC 750. Calculate the incremental earnings from the purchase of the XC-750 below (with vs. without XC D): (Round to the nearest doller.) Incremental Effects Year Sales Revenues Cost ot Goods Sold S G, and A Expenses 1-10 s (5,050,000) S 10,100,000 $3,53b,0D0$D,OD) 0 S (1,980,000) () $ (26800 1,515,0D) S 7B2 ODD S530,250 S (273,700) $984,750) S 508,300 EBIT Taxes at 35% Unlevered Nel Incorrme b. Determine the free cash flow from the purchase of the XC 750 Enter wour answer in the answer box and then click Check Answer Clear All Check Answer Homework: Homework-Chap 9 Save Score: 3.73 of 4 pts 21 of 25 (25 complete) HW Score: 98.4%, 98.4 of 100 pts P 9-33 (similar to) E Question Help firm has just completed a 546,000 feasibility study to analyze the decision to buy the XC-750, resulting in the fallowing estimatos Marketing: Once the XC-750 is operational next year, the extra capacity is expected to generate $10.10 million per year in additional sales, which will contnue tor the 10-year lite of the machine pe at ons The deru tion caused by the installation will decrease sales by S5 05 mlion the ear s with Hilinghams existi increased production will also roquire increased inventory on hand of 51.11 million during the life of the projcct, including ycar 0 Humen Resources: The expansion will require additional sales and admin strative personnel at a cost ot $1.98 million per year products the c t of goods t he products produced by me x 750 s expected to be 70 of ther sale price The Ace Ant The X -75 il be depreciated a the sta htine met d over the 10-year life of the machine The firm expects rece ables m the ne sales to be 16% of revenues and payables to be 115 ofthe cost of ods sold Rillingham's mar nal corporate tax rate is 35 a. Determine the incremental eamings trom the purchase ot the XC-rb0 b. Determine the free cash flow from the purchase of the XC 750 c. ir the appropriate; cost of capital ror the expansion is 10 5%, uompute the NPVof the purchase d. While the expected new sales Wl be $10 10 million per year trom the expansion, estimates range trom $8 20 miion to $12 00 million What is the NPV in the worst case7 In the best case? e. What is the break even level of new sales from the expansion? What is the breakaven level for the cost of gcods sold? f. Bil ngham uld ris e d purchast the C 900 which o s even g'e c pacity The cost or the XC-900 $3 92 m on. The tra a city would n be us ful in h first t o years of op al n bul old allow or additional sales in years 3 through 10 What level ot additonal sales (ahove the S10.1D million expected tor the XC-s0) per year in those years woula justity purchasing the larger machine? a. Determine the incremental eanings from the purchase of the XC 750. Calculate the incremental earnings from the purchase of the XC-750 below (with vs. without XC D): (Round to the nearest doller.) Incremental Effects Year Sales Revenues Cost ot Goods Sold S G, and A Expenses 1-10 s (5,050,000) S 10,100,000 $3,53b,0D0$D,OD) 0 S (1,980,000) () $ (268001 EBIT Taxes at 35% Unlevered Nel Incorrme 1,515,0D) S 7B2 ODD S530,250 S (273,700) $984,750) S 508,300 b. Determine the free cash flow from the purchase of the XC 750 Enter wour answer in the answer box and then click Check Answer Clear All Check Answer Homework: Homework-Chap 9 Save Score: 3.73 of 4 pts 21 of 25 (25 complete) HW Score: 98.4%, 98.4 of 100 pts P 9-33 (similar to) E Question Help firm has just completed a 546,000 feasibility study to analyze the decision to buy the XC-750, resulting in the fallowing estimatos Marketing: Once the XC-750 is operational next year, the extra capacity is expected to generate $10.10 million per year in additional sales, which will contnue tor the 10-year lite of the machine pe at ons The deru tion caused by the installation will decrease sales by S5 05 mlion the ear s with Hilinghams existi increased production will also roquire increased inventory on hand of 51.11 million during the life of the projcct, including ycar 0 Humen Resources: The expansion will require additional sales and admin strative personnel at a cost ot $1.98 million per year products the c t of goods t he products produced by me x 750 s expected to be 70 of ther sale price The Ace Ant The X -75 il be depreciated a the sta htine met d over the 10-year life of the machine The firm expects rece ables m the ne sales to be 16% of revenues and payables to be 115 ofthe cost of oods sold Rillingham's mar inal corporate tax rate is 35 a. Determine the incremental eamings trom the purchase ot the XC-rb0 b. Determine the free cash flow from the purchase of the XC 750 c. ir the appropriate; cost of capital ror the expansion is 10 5%, uompute the NPVof the purchase d. While the expected new sales Wl be $10 10 million per year trom the expansion, estimates range trom $8 20 miion to $12 00 million What is the NPV in the worst case7 In the best case? e. What is the break even level of new sales from the expansion? What is the breakaven level for the cost of gcods sold? f. Bil ngham uld ris e d purchast the C 900 which o s even g'e c pacity The cost or the XC-900 $3 92 m on. The tra a city would n be us ful in h first t o years of op al n bul old allow or additional sales in years 3 through 10 What level ot additonal sales (ahove the S10.1D million expected tor the XC-s0) per year in those years woula justity purchasing the larger machine? a. Determine the incremental eanings from the purchase of the XC 750. Calculate the incremental earnings from the purchase of the XC-750 below (with vs. without XC D): (Round to the nearest doller.) Incremental Effects Year Sales Revenues Cost ot Goods Sold S G, and A Expenses 1-10 s (5,050,000) S 10,100,000 $3,53b,0D0$D,OD) 0 S (1,980,000) () $ (268001 EBIT Taxes at 35% Unlevered Nel Incorrme 1,515,0D) S 7B2 ODD S530,250 S (273,700) $984,750) S 508,300 b. Determine the free cash flow from the purchase of the XC 750 Enter wour answer in the answer box and then click Check Answer Clear All Check Answer Homework: Homework - Chap 9 Save Score: 3.73 of 4 pts 21 af 25 (25 complete) HW Score: 98.4%, 98.4 of 100 pts P 9-33 (similar to) Question Help tinm has just completed a $46,000 teasiblity study to analyze the decision to huy the Xc-750, resuiting in the tollowing estimates Marketing: Once the XC-750 is operational next year, the extra capacity is expected to generate $10.10 million per year in additional sales, which will continue for the 10 year life of the machine Operations: The disrupt on caused b the in tal at n w l decrease sales b 5 million his year As with Hillingham's existing products the cost of cods or the pro ucts produced by increascd producticn will also require increasod iventory on hand of 51.11 millicn during the life of the project, including year 0 Humen Resounces The expansion will require sdditional sales and administratve personnel at a cost ot $1 98 million per year e xc./ s expected be r % o their sale price The Account ng The XC-75 will be depreciat ia the stra htine netho over the 10 yea lite of the machine The firm e s receivables f the new sales to e 16% of venues and payable 10 e 1 1% or the cost of goods sold Billingham's marginal corporate lax rate is 35% a. Determine the incremental earnings frem the purchase of the XC-750 b. Determine the free cash flow from the purchase of the XC-750 c. If the appropriate cost of capital for the expansion is 10.5%, compute the NPV of the purchase d. While the expected new salcs will be $10.10 million per year from thec cxpansion, estimates range from 58.20 million to $1200 million. What is the NPV in the worst case? In the best case? e. What is the break-even level ot new sales trom the expansion? What is the breakeven level tor the cost ot goods sold f. Bilinghm could inste d purchase the XC 900, which offers even greater capacity. The cost of te C 900 s S3.92 million. The extra capacity would not be useful in he rst wo years o operation, but would allow for additional sales in years 3 through 10 Whiat level of additional sales (above the $10.10 million expected for the XC-750) per year in these years would justify purchasing the larer machine? 268,000 268 000 268 000 s s (2,680,000) s Capital Fxpendtures Change on Net Working Capital (69DBs Free cash fow C. If the appropriate cost of capital for the expansion is 10 5%, compute the NPV of the purchase The NPV of the purchase is s -135,797 Round to the nearest dollar) d. While the expected new sales will be $10.10 million per year from the expansion, estimates range from S8.20 million to $12.00 million. What is the NPV in the worst case? In the best case? The NPV ot the purchase tor sales ot $8 20 million is $-2,274,138 (Round to the nearest dolar) The NPV of the purchase for sales of S12.00 million is S 2,002,545 Round to the nearest dollar.) e. What is the break-even level ot new sales trom the expansion? Th breakeven Ivel of new sales from the expansion iss Round to the nearest dollar) $1B38,30 S (4,355,00 S(481,150) S 776 301886 30 $B38,300 Enter your answer In the answer box and then click Check Answer parts Clear Al Check Answer Homework: Homework-Chap 9 Save Score: 3.73 of 4 pts 21 of 25 (25 complete) HW Score: 98.4%, 98.4 of 100 pts P 9-33 (similar to) E Question Help Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC 750. The cost of the XC- 750 is $2.68 million. Unfortunately, installing this machine will take several months and wi partially disrupt production. The firrn has just complcted a 546,000 feasibility study to analyze the decision to buy the XC-750, resulting in the [ellowing estimales Marketing Once the XC-50 is operational next year, the extra capacity is expected to generate $10.10 million per year in additonsl sales, which will contnue tor the 10-year lite ot the machine per ons The den tion caused by the instal a n will decrease sales $5 5 m on this ear As with Rdlingha s existing products increased produclion will also require increased inventory on hand of $1.11 million during the life of the projet, including year 0 e c st goods or he products produced by me X 750 s expected 1 70% of their sale pri e The Human Resources The expansion will require additional sales and acmin strative personnel at a cost at 51.98 million per yea A oum ng The C-750 ill be depreciated a the str htli e metod over the 10-year life of the machin The firm expects re ables from the ne sais to be 15% of revenue and payable to be 11% ofthe cost of goods sold Billingham's mar al corporate tax rate is 35% a. Determine the incremental eamings trom the purchase ot the XC-50 b. Determine the free cash flow from the purchase of the XC 750 c. If the appropriate cost of capital for lhe expansion is 10 5%, compute the NPVof the purchase. d. While the expected new sales Wl be $10 10 million per year trom the expansion, estimates range trom $8 20 miian to $12 0 million What is the NPV in the worst case? In the best case? e. What is the break even level of new sales from the expansion? What is the breakeven level for the cost of gcods sold? f. Bilinaham could inslead vurcase the XC-900. which offers even urealer capacily The cosl of the XC-900 is $3.92 mllion. The extra cavacilw would nol be useful in Uhe first two vears cf operatio bul would allow for additional sales in vears 3 throuuh 10 a. Determine the incremental eanings from the purchase of the XC 750. Calculate the incremental earnings from the purchase of the XC-750 below (with vs. without XC D): (Round to the nearest doller.) Incremental Effects Year Sales Revenues Cost ot Goods Sold S G, and A Expenses 1-10 s (5,050,000) S 10,100,000 $3,53b,0D0$D,OD) 0 S (1,980,000) () $ (26800 1,515,0D) S 7B2 ODD S530,250 S (273,700) $984,750) S 508,300 EBIT Taxes at 35% Unlevered Nel Incorrme b. Determine the free cash flow from the purchase of the XC 750 Enter wour answer in the answer box and then click Check Answer Clear All Check Answer Homework: Homework-Chap 9 Save Score: 3.73 of 4 pts 21 of 25 (25 complete) HW Score: 98.4%, 98.4 of 100 pts P 9-33 (similar to) E Question Help firm has just completed a 546,000 feasibility study to analyze the decision to buy the XC-750, resulting in the fallowing estimatos Marketing: Once the XC-750 is operational next year, the extra capacity is expected to generate $10.10 million per year in additional sales, which will contnue tor the 10-year lite of the machine pe at ons The deru tion caused by the installation will decrease sales by S5 05 mlion the ear s with Hilinghams existi increased production will also roquire increased inventory on hand of 51.11 million during the life of the projcct, including ycar 0 Humen Resources: The expansion will require additional sales and admin strative personnel at a cost ot $1.98 million per year products the c t of goods t he products produced by me x 750 s expected to be 70 of ther sale price The Ace Ant The X -75 il be depreciated a the sta htine met d over the 10-year life of the machine The firm expects rece ables m the ne sales to be 16% of revenues and payables to be 115 ofthe cost of ods sold Rillingham's mar nal corporate tax rate is 35 a. Determine the incremental eamings trom the purchase ot the XC-rb0 b. Determine the free cash flow from the purchase of the XC 750 c. ir the appropriate; cost of capital ror the expansion is 10 5%, uompute the NPVof the purchase d. While the expected new sales Wl be $10 10 million per year trom the expansion, estimates range trom $8 20 miion to $12 00 million What is the NPV in the worst case7 In the best case? e. What is the break even level of new sales from the expansion? What is the breakaven level for the cost of gcods sold? f. Bil ngham uld ris e d purchast the C 900 which o s even g'e c pacity The cost or the XC-900 $3 92 m on. The tra a city would n be us ful in h first t o years of op al n bul old allow or additional sales in years 3 through 10 What level ot additonal sales (ahove the S10.1D million expected tor the XC-s0) per year in those years woula justity purchasing the larger machine? a. Determine the incremental eanings from the purchase of the XC 750. Calculate the incremental earnings from the purchase of the XC-750 below (with vs. without XC D): (Round to the nearest doller.) Incremental Effects Year Sales Revenues Cost ot Goods Sold S G, and A Expenses 1-10 s (5,050,000) S 10,100,000 $3,53b,0D0$D,OD) 0 S (1,980,000) () $ (268001 EBIT Taxes at 35% Unlevered Nel Incorrme 1,515,0D) S 7B2 ODD S530,250 S (273,700) $984,750) S 508,300 b. Determine the free cash flow from the purchase of the XC 750 Enter wour answer in the answer box and then click Check Answer Clear All Check Answer Homework: Homework-Chap 9 Save Score: 3.73 of 4 pts 21 of 25 (25 complete) HW Score: 98.4%, 98.4 of 100 pts P 9-33 (similar to) E Question Help firm has just completed a 546,000 feasibility study to analyze the decision to buy the XC-750, resulting in the fallowing estimatos Marketing: Once the XC-750 is operational next year, the extra capacity is expected to generate $10.10 million per year in additional sales, which will contnue tor the 10-year lite of the machine pe at ons The deru tion caused by the installation will decrease sales by S5 05 mlion the ear s with Hilinghams existi increased production will also roquire increased inventory on hand of 51.11 million during the life of the projcct, including ycar 0 Humen Resources: The expansion will require additional sales and admin strative personnel at a cost ot $1.98 million per year products the c t of goods t he products produced by me x 750 s expected to be 70 of ther sale price The Ace Ant The X -75 il be depreciated a the sta htine met d over the 10-year life of the machine The firm expects rece ables m the ne sales to be 16% of revenues and payables to be 115 ofthe cost of oods sold Rillingham's mar inal corporate tax rate is 35 a. Determine the incremental eamings trom the purchase ot the XC-rb0 b. Determine the free cash flow from the purchase of the XC 750 c. ir the appropriate; cost of capital ror the expansion is 10 5%, uompute the NPVof the purchase d. While the expected new sales Wl be $10 10 million per year trom the expansion, estimates range trom $8 20 miion to $12 00 million What is the NPV in the worst case7 In the best case? e. What is the break even level of new sales from the expansion? What is the breakaven level for the cost of gcods sold? f. Bil ngham uld ris e d purchast the C 900 which o s even g'e c pacity The cost or the XC-900 $3 92 m on. The tra a city would n be us ful in h first t o years of op al n bul old allow or additional sales in years 3 through 10 What level ot additonal sales (ahove the S10.1D million expected tor the XC-s0) per year in those years woula justity purchasing the larger machine? a. Determine the incremental eanings from the purchase of the XC 750. Calculate the incremental earnings from the purchase of the XC-750 below (with vs. without XC D): (Round to the nearest doller.) Incremental Effects Year Sales Revenues Cost ot Goods Sold S G, and A Expenses 1-10 s (5,050,000) S 10,100,000 $3,53b,0D0$D,OD) 0 S (1,980,000) () $ (268001 EBIT Taxes at 35% Unlevered Nel Incorrme 1,515,0D) S 7B2 ODD S530,250 S (273,700) $984,750) S 508,300 b. Determine the free cash flow from the purchase of the XC 750 Enter wour answer in the answer box and then click Check Answer Clear All Check Answer Homework: Homework - Chap 9 Save Score: 3.73 of 4 pts 21 af 25 (25 complete) HW Score: 98.4%, 98.4 of 100 pts P 9-33 (similar to) Question Help tinm has just completed a $46,000 teasiblity study to analyze the decision to huy the Xc-750, resuiting in the tollowing estimates Marketing: Once the XC-750 is operational next year, the extra capacity is expected to generate $10.10 million per year in additional sales, which will continue for the 10 year life of the machine Operations: The disrupt on caused b the in tal at n w l decrease sales b 5 million his year As with Hillingham's existing products the cost of cods or the pro ucts produced by increascd producticn will also require increasod iventory on hand of 51.11 millicn during the life of the project, including year 0 Humen Resounces The expansion will require sdditional sales and administratve personnel at a cost ot $1 98 million per year e xc./ s expected be r % o their sale price The Account ng The XC-75 will be depreciat ia the stra htine netho over the 10 yea lite of the machine The firm e s receivables f the new sales to e 16% of venues and payable 10 e 1 1% or the cost of goods sold Billingham's marginal corporate lax rate is 35% a. Determine the incremental earnings frem the purchase of the XC-750 b. Determine the free cash flow from the purchase of the XC-750 c. If the appropriate cost of capital for the expansion is 10.5%, compute the NPV of the purchase d. While the expected new salcs will be $10.10 million per year from thec cxpansion, estimates range from 58.20 million to $1200 million. What is the NPV in the worst case? In the best case? e. What is the break-even level ot new sales trom the expansion? What is the breakeven level tor the cost ot goods sold f. Bilinghm could inste d purchase the XC 900, which offers even greater capacity. The cost of te C 900 s S3.92 million. The extra capacity would not be useful in he rst wo years o operation, but would allow for additional sales in years 3 through 10 Whiat level of additional sales (above the $10.10 million expected for the XC-750) per year in these years would justify purchasing the larer machine? 268,000 268 000 268 000 s s (2,680,000) s Capital Fxpendtures Change on Net Working Capital (69DBs Free cash fow C. If the appropriate cost of capital for the expansion is 10 5%, compute the NPV of the purchase The NPV of the purchase is s -135,797 Round to the nearest dollar) d. While the expected new sales will be $10.10 million per year from the expansion, estimates range from S8.20 million to $12.00 million. What is the NPV in the worst case? In the best case? The NPV ot the purchase tor sales ot $8 20 million is $-2,274,138 (Round to the nearest dolar) The NPV of the purchase for sales of S12.00 million is S 2,002,545 Round to the nearest dollar.) e. What is the break-even level ot new sales trom the expansion? Th breakeven Ivel of new sales from the expansion iss Round to the nearest dollar) $1B38,30 S (4,355,00 S(481,150) S 776 301886 30 $B38,300 Enter your answer In the answer box and then click Check Answer parts Clear Al Check