One of X Company's production machines was badly damaged recently. Unfortunately, the machine was purchased just two years earlier for $40,000. The company must either repair the machine or purchase a new machine. The estimated cost of repairing the machine is $21,000, after which operating costs will be $60,000 a year. It will also require a maintenance check in the third year that is estimated to cost $2,000. A new machine will cost $83,000, but it will be more efficient than the repaired machine, with annual operating cost savings of $8,000. Both the repaired machine and the new machine will last for five years, at which time the repaired one would be worthless, and new one would be worth $6,500. If it is not repaired, the damaged machine can be sold immediately for $6,000. Assuming a discount rate of 5%, what is the net present value of buying the new machine instead of repairing the damaged machine? [Use the present value tables in the Coursepack.] Near the end of 2020, X Company had produced and sold 68,100 units of its only product. Costs for these units were: Total $122,580 95,340 177,060 122,580 Per-Unit $1.80 1.40 2.60 1.80 Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administration Fixed selling and administration Total 83,763 1.23 95,340 1.40 $696,663 $10.23 Just before the year ended, a company offered to buy 4,850 units for $13.52 each. X Company had the capacity to produce the additional 4,850 units, but because the special order product was slightly different than the regular product, direct material costs were expected to increase by $0.20 per unit, and some special equipment would have to be rented for a total of $20,000. 4. What would profit have been on the special order? X Company currently buys a part from a supplier for $13.66 per unit but is considering making the part itself next year. This year, they purchased 3,500 units of this part; next year, they will need 3,800 units. Estimated costs to make the part next year are: Total Per-Unit $3.49 3.58 Direct materials Direct labor Variable overhead Fixed overhead Total 3.80 5.50 $16.37 $12,215 12,530 13,300 19,250 $57,295 Of the estimated fixed overhead, $10,972 would be additional fixed overhead costs; the remainder would be common costs allocated to the part. X Company currently receives $2,200 a year by renting unused factory space, but it will have to use this space to make the part. If X Company continues to buy the part instead of making it, it will save