! Required information 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 $9.48 million, and the equipment has a useful life of 7 years with a residual value of $1,150,000. The company will use straight- line depreciation. Beacon could expect a production increase of 36,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) 88,000 units Proposed (automation) 124,000 units Per Per Production and sales volume Unit Total Unit Sales revenue $ 95 $ ? $95 Total $ ? Variable costs Direct materials $ 18 $ 18 Direct labor 20 ? Variable manufacturing overhead Total variable manufacturing costs Contribution margin 10 10 48 $ 47 ? ? $ 51 Fixed manufacturing costs Net operating income $ 1,250,000 ? ? $ 2,270,000 ? PA11-2 Part 5 5. Recalculate the NPV using a 9 percent discount rate. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Enter the answer in whole dollars.) Net present value