PA11-2 (Algo) 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 $10.36 million, and the equipment has a useful life of 8 years with a residual value of $1,080,000. The company will use straight- line depreciation. Beacon could expect a production increase of 49,000 units per year and a reduction of 20 percent in the labor cost per unit. 15 Proposed (automation) 125,000 units Per Unit Total $ 99 $ 2 Current (no automation) 76,000 units Per Production and sales volume Unit Total Sales revenue $ 99 $ 7 Variable costs Direct materials $ 17 Direct labor 30 Variable manufacturing overhead 11 Total variable manufacturing 58 costs Contribution margin $ 41 2 Fixed manufacturing costs $ 1,120,000 Net operating income 2 $ 17 2 11 7 $ 47 $ 2,270,000 2 ces PA11-2 Part 2 2. Determine the project's accounting rate of return (Round your answer to 2 decimal places.) Accounting rate of return %