Main Menu Help Assignments Do Homework Take a Quia/Test Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750 The cost of the XC 750 a $2.5 milion Unfortunately, installing this machine will take several month and will partially disrupt production. The firm has just completed a 548,000 tably way to arwyze 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 generato $10.15 milion per year in additional, which will contine for the ten your life of the machine Operations: The diwuption Chuted by the installation wil decrease sales by $5.06 milion this year. As wih Bingham xisting produch, the cost of goods for the products produced by the XC-750 is expected to be 71% of the sale price. The increased production wo equire increased Inventory on und $12 milion during the life of the project. The increased production will require additional invertory of $1.2 million to be abled in your and lead in year 10 Human Resources. The expansion will require additional sales and administrative personnel at a cost of $20 million per year Accounting The XC-750 wil be depreciated via the straight-ine method in years 1-10 Rocovaties are expected to be exomes and to be of the cost of goods sok, Bingham's marginal corporate tax rate is 15% a. Determine the incremental carvings from the purchase of the XC-750 b. Den the tree cash whom the purchase of the XC-750. c. the role cost of capital for the exis 103%.com the NPV of the purchase a. Determine the incremental cars from the purchase of the XC-750 Calculate the incremental camins from the purchase of the XC-750 below found to the solar) Incremental Earnings Clear all Check ower Get more help Help me solve this View an example -Review Resim SS GS BE Type here to search DOLL Help the PTOCUS POCU vyro AL-150 is expect to 00 17 Sprice. The increase POVOSTI I Oroquero yo no SLX million during the life of the project. The increased production will require additional inventory of $1.2 million, to be added in year and depleted in year 10 Human Resources. The expansion will require additional sales and administrative personnel at a cost of $2.02 million per year Accounting: The XC-750 will be depreciated via the straight-line method in years 1-10. Receivables are expected to be 14% of revers and payables to be 9% 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 b. Determine the free cash fow from the purchase of the XC-750 c. W the appropriate cost of capital for the expansion is 10.3%, compute the NPV of the purchase d. While the expected new salos will be $10.15 million per year from the expansion estimates range from $8,1 milion to $122 milion 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 as a percentage of 1. Bilingham could instead purchase the XC-900, which offers even greater capacity. The cost of the XC-900 is $400 milion. 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 $10.15 milion expected for the XC-750) per year in those years would justify purchasing the larger machine? a. Deformine the incremental carings from the purchase of the XC-750 Calculate the incremental camnings from the purchase of the XC-750 below. Round to the nearest dollar) Incremental Earnings Clear all Check answer Get more help View an example Help me solve this S Review SS Resume O pe here to search Main Menu Help Assignments Do Homework Take a Quia/Test Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750 The cost of the XC 750 a $2.5 milion Unfortunately, installing this machine will take several month and will partially disrupt production. The firm has just completed a 548,000 tably way to arwyze 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 generato $10.15 milion per year in additional, which will contine for the ten your life of the machine Operations: The diwuption Chuted by the installation wil decrease sales by $5.06 milion this year. As wih Bingham xisting produch, the cost of goods for the products produced by the XC-750 is expected to be 71% of the sale price. The increased production wo equire increased Inventory on und $12 milion during the life of the project. The increased production will require additional invertory of $1.2 million to be abled in your and lead in year 10 Human Resources. The expansion will require additional sales and administrative personnel at a cost of $20 million per year Accounting The XC-750 wil be depreciated via the straight-ine method in years 1-10 Rocovaties are expected to be exomes and to be of the cost of goods sok, Bingham's marginal corporate tax rate is 15% a. Determine the incremental carvings from the purchase of the XC-750 b. Den the tree cash whom the purchase of the XC-750. c. the role cost of capital for the exis 103%.com the NPV of the purchase a. Determine the incremental cars from the purchase of the XC-750 Calculate the incremental camins from the purchase of the XC-750 below found to the solar) Incremental Earnings Clear all Check ower Get more help Help me solve this View an example -Review Resim SS GS BE Type here to search DOLL Help the PTOCUS POCU vyro AL-150 is expect to 00 17 Sprice. The increase POVOSTI I Oroquero yo no SLX million during the life of the project. The increased production will require additional inventory of $1.2 million, to be added in year and depleted in year 10 Human Resources. The expansion will require additional sales and administrative personnel at a cost of $2.02 million per year Accounting: The XC-750 will be depreciated via the straight-line method in years 1-10. Receivables are expected to be 14% of revers and payables to be 9% 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 b. Determine the free cash fow from the purchase of the XC-750 c. W the appropriate cost of capital for the expansion is 10.3%, compute the NPV of the purchase d. While the expected new salos will be $10.15 million per year from the expansion estimates range from $8,1 milion to $122 milion 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 as a percentage of 1. Bilingham could instead purchase the XC-900, which offers even greater capacity. The cost of the XC-900 is $400 milion. 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 $10.15 milion expected for the XC-750) per year in those years would justify purchasing the larger machine? a. Deformine the incremental carings from the purchase of the XC-750 Calculate the incremental camnings from the purchase of the XC-750 below. Round to the nearest dollar) Incremental Earnings Clear all Check answer Get more help View an example Help me solve this S Review SS Resume O pe here to search