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I need help with part 2-5! Required information PA11-2 (Static) Making Automation Decision [LO 11-1, 11-2, 11-3, 11-5] [The following information applies to the questions
I need help with part 2-5!
Required information PA11-2 (Static) Making Automation Decision [LO 11-1, 11-2, 11-3, 11-5] [The following information applies to the questions displayed below.] Beacon Company is considering automating its production facility. The initial investment in automation would be $15 million, and the equipment has a useful life of 10 years with a residual value of $500,000. The company will use straightline depreciation. Beacon could expect a production increase of 40,000 units per year and a reduction of 20 percent in the labor cost per unit. PA11-2 Part 1 Required: 1-a. Complete the following table showing the totals. 1-b. Does Beacon Company favor automation? Complete this question by entering your answers in the tabs below. Complete the following table showing the totals. Note: Enter your answers in whole dollars, not in millions. Required: 2. Determine the project's accounting rate of return. Note: Round your answer to 2 decimal places. Required: 3. Determine the project's payback period. Note: Round your answer to 2 decimal places. Required: 4. Using a discount rate of 15 percent, calculate the net present value (NPV) of the proposed investment. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Enter the answer in whole dollars. Required: 5. Recalculate the NPV using a 10 percent discount rate. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of \$1.) Note: Use appropriate factor(s) from the tables provided. Enter the answer in whole dollarsStep by Step Solution
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