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pls answer correctly Buckingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750. The cost of the XC-750 is 52.73

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Buckingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750. The cost of the XC-750 is 52.73 million. Unfortunatoly, instaling this machine wil take several months and wil partially disrupt production. The firm has just completed a $50, 000 feasibeity study to analyze the decision to buy the XC-750, resulting in the following estimates: - Markoting: Once the XC-750 is operational next year, the extra capacty is expected to generate $10.20 milion per year in additicnat saies, which will continue for the to-year like of the machine: - Operations; The disfuption caused by the installation will decrease sales by $4.93 million this year. As with Buckingham's existing products, the cost of gocis for the products produced by the XC-750 is expected to be 73% of their sale price. The increased production will also require increased inventory on hand of $7.16 milion durin the life of the project, including year 0 . - Human Resources: The expansion wit require additional sales and administrative personnel at a cost of $1.91 millicn per year. - Accounding: The XC-750 has a CCA rate of 30%, and no salvage value is expected. The firm expects recaivables from the new sales to be 14% of ravenues and payables to be 10% of the cost of goods sold. Buckingham's marginal corporate tax rate is 35%. Buckingham could instead purchase the XC-900, which offers even greater capacity. The cost of the XC- 900 is $4.07 million. The extra capacity would not be usalul in the first two years of operation but would allow for additional sales in years 3-10. What kind of real option does the XC-900 machine provide to Buckingham? Whet kind of real option does the XC-900 machine provide to Buckingharm? Select all that apply. A. If it would be better if producton remains the same, Buckingham is under no obligation to utilize all of the XC- 900 production capacily. B. If it would be beneficial to expand production, Buckingham wil increase production with the XC- 900 . C. The XC-900 allows Buckingham the option to expand production starting in year 3. D. The expansion will roquire additional sales and administrative personnet

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