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please do The following information applies to the questions displayed below.) Beacon Company is considering automating its production facility. The initial investment in automation would

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The following information applies to the questions displayed below.) Beacon Company is considering automating its production facility. The initial investment in automation would be $8.55 million, and the equipment has a useful life of 7 years with a residual value of $1,130,000. The company will use straight- Vine depreciation. Beacon could expect a production increase of 33,000 units per year and a reduction of 20 percent in the labor cost per unit Current (no automation) 86,000 units Per Unit Total 599 $ Proposed (automation) 119,000 units Per Unit $ 99 Total $2 Production and sales volume Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing costs Contribution margin Fixed manufacturing costs Net operating income $ 15 30 9 54 $45 $15 2 9 ? $51 7 $1,130,000 7 52.320.000 2 4. Using a discount rate of 13 percent calculate the net present value (NPV) of the proposed investment future Value of St Present Value $1. Euture Value Annuity of $1. Present Value Annully of $1) (Use appropriate factor(a) from the tables provided. Negative amount should be indicated by a minus sign. Enter the answer in whole dollars.)

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