I need the last part of E and f. Everything else is correct.

a. Determine the incremental earnings from the purchase of the XC-750.

Calculate the incremental earnings from the purchase of the XC-750 below:(Round to the nearest dollar.)

Incremental Earnings
Year		0
Sales Revenues	$	(5,040,000)
Cost of Goods Sold	$	3,528,000
S, G, and A Expenses	$	0
Depreciation	$	0
EBIT	$	(1,512,000)
Taxes at 15%	$	226,800
Unlevered Net Income	$	(1,285,200)

(Round to the nearest dollar.)

Incremental Earnings
Year		1-10
Sales Revenues	$	10,200,000
Cost of Goods Sold	$	(7,140,000)
S, G, and A Expenses	$	(2,060,000)
Depreciation	$	(278,000)
EBIT	$	722,000
Taxes at 15%	$	(108,300)
Unlevered Net Income	$	613,700

b. Determine the free cash flow from the purchase of the XC-750.

Calculate the free cash flow from the purchase of the XC-750:(Round to the nearest dollar.)

Incremental Free Cash Flow
Year		0
Unlevered Net Income	$	(1,285,200)
Depreciation	$	0
Capital Expenditures	$	(2,780,000)
Change in Net Working Capital	$	(726,400)
Free cash flow	$	(4,791,600)

(Round to the nearest dollar.)

Incremental Free Cash Flow
Year		1
Unlevered Net Income	$	613,700
Depreciation	$	278,000
Capital Expenditures	$	0
Change in Net Working Capital	$	(1,371,600)
Free cash flow	$	(479,900)

(Round to the nearest dollar.)

Incremental Free Cash Flow
Year		2-9
Unlevered Net Income	$	613,700
Depreciation	$	278,000
Capital Expenditures	$	0
Change in Net Working Capital	$	0
Free cash flow	$	891,700

(Round to the nearest dollar.)

Incremental Free Cash Flow
Year		10
Unlevered Net Income	$	613,700
Depreciation	$	278,000
Capital Expenditures	$	0
Change in Net Working Capital	$	1,180,000
Free cash flow	$	2,071,700

(Round to the nearest dollar.)

Incremental Free Cash Flow
Year		11
Unlevered Net Income	$	0
Depreciation	$	0
Capital Expenditures	$	0
Change in Net Working Capital	$	918,000
Free cash flow	$	918,000

c. If the appropriate cost of capital for the expansion is 10.3 %, compute the NPV of the purchase.

The NPV of the purchase is $129061. (Round to the nearest dollar.)

d. While the expected new sales will be $ 10.2 million per year from the expansion, estimates range from $8.15 million to $12.25 million. What is the NPV in the worst case? In the best case?

The NPV of the purchase for sales of $8.15 million is $negative 2937516. (Round to the nearest dollar.)

The NPV of the purchase for sales of $12.25 million is $3195638. (Round to the nearest dollar.)

e. What is the break-even level of new sales from the expansion?

The break-even level of new sales from the expansion is $10113720. (Round to the nearest dollar.)

What is the break-even level for the cost of goods sold?

The break-even level for the cost of goods sold is ?????????? (Round to the nearest dollar.)

f. What level of additional sales (above the $10.2 million expected for the XC-750) per year in those years would justify purchasing the larger machine????????

Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750. The cost of the XC-750 is $2.78 million. Unfortunately. installing this machine will take several months and will partially disrupt production. The firm has just completed a $48,000 feasibility study to analyze the decision to buy the XC-750, resulting in the following estimates: Marketing: Once the XC-750 is operating next year, the extra capacity is expected to generate $10.2 million per year in additional sales, which will continue for the ten-year life of the machine. Operations: The disruption caused by the installation will decrease sales by $5.04 million this year. As with Billingham?s existing increased inventory on hand of $1.18 million during the life of the project. The increased production will require additional invent roducts, the cost of goods for the products produced by the XC-750 is expected to be 70% of their sale price. The increased production will also require of $1.18 million, to be added in year 0 and depleted in year 10 Human Resources: The expansion will require additional sales and administrative personnel at a cost of $2.08 million per year. Accounting: The XC-750 will be depreciated via the straight-line method in years 1?10. Receivables are expected to be 16% of revenues and payables to be 10% of the cost of goods sold. Billingham?s marginal corporate tax rate is 15 % a. Determine the incremental earnings from the purchase of the XC-750 c. If the appropriate cost of capital for the expansion is 10.3%, compute the NPV of the purchase. b. Determine the free cash flow from the purchase of the XC-750 d. While the expected new sales will be $10.2 million per year from the expansion, estimates range from $8.15 million to $12.25 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 break-even level for the cost of goods sold? f. Billingham could instead purchase the XC-900, which offers even greater capacity. The cost of the XC-900 is $4.05 million. The extra capacity would not be useful in the first two years of operation, but would allow for additional sales in years 3-10. What level of additional sales (above the $10.2 million expected for the XC-750) per year in those years would justify purchasing the larger machine? Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750. The cost of the XC-750 is $2.78 million. Unfortunately. installing this machine will take several months and will partially disrupt production. The firm has just completed a $48,000 feasibility study to analyze the decision to buy the XC-750, resulting in the following estimates: Marketing: Once the XC-750 is operating next year, the extra capacity is expected to generate $10.2 million per year in additional sales, which will continue for the ten-year life of the machine. Operations: The disruption caused by the installation will decrease sales by $5.04 million this year. As with Billingham?s existing increased inventory on hand of $1.18 million during the life of the project. The increased production will require additional invent roducts, the cost of goods for the products produced by the XC-750 is expected to be 70% of their sale price. The increased production will also require of $1.18 million, to be added in year 0 and depleted in year 10 Human Resources: The expansion will require additional sales and administrative personnel at a cost of $2.08 million per year. Accounting: The XC-750 will be depreciated via the straight-line method in years 1?10. Receivables are expected to be 16% of revenues and payables to be 10% of the cost of goods sold. Billingham?s marginal corporate tax rate is 15 % a. Determine the incremental earnings from the purchase of the XC-750 c. If the appropriate cost of capital for the expansion is 10.3%, compute the NPV of the purchase. b. Determine the free cash flow from the purchase of the XC-750 d. While the expected new sales will be $10.2 million per year from the expansion, estimates range from $8.15 million to $12.25 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 break-even level for the cost of goods sold? f. Billingham could instead purchase the XC-900, which offers even greater capacity. The cost of the XC-900 is $4.05 million. The extra capacity would not be useful in the first two years of operation, but would allow for additional sales in years 3-10. What level of additional sales (above the $10.2 million expected for the XC-750) per year in those years would justify purchasing the larger machine