production. The firm has just completed a $$50,000$ feasibility study to analyze the decision to buy the XC$-750,$ resulting in the following estimates

Marketing: Once the XC$-750$ is operational next year, the extra capacity is expected to generate $$10\mathrm{.}00$ million per year in additional sales, which will continue for the $10-y$ ear life of the machine.

increased production will also require increased inventory on hand of $$1\mathrm{.}00$ million during the life of the project, including year $0.$

Human Resources: The expansion will require additional sales and administrative personnel at a cost of $$2\mathrm{.}00$ million per year. marginal corporate tax rate is $21\%.$

a$.$ Determine the incremental earnings from the purchase of the XC$-750.$

b$.$ Determine the free cash flow from the purchase of the XC$-750$

c$.$ If the appropriate cost of capital for the expansion is $10\mathrm{.}0\%,$ compute the NPV of the purchase.

d$.$ While the expected new sales will be $$10\mathrm{.}00$ million per year from the expansion, estimates range from $$8\mathrm{.}00$ million to $$12\mathrm{.}00$ million. 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 breakeven level for the cost of goods sold?