Required information [The following information applies to the questions displayed below) Beacon Company is considering automating its production facility. The initial investment in automation would be $7.39 million, and the equipment has a useful life of 6 years with a residual value of $1,030,000. The company will use straight- line depreciation. Beacon could expect a production increase of 45,000 units per year and a reduction of 20 percent in the labor cost per unit Current (no automation) 88,000 units Per Unit Total $ 91 $ Proposed (automation) 133,000 units Per Total $ 91 $? $ 16 Production and sales volume Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing costs Contribution margin Fixed manufacturing costs Niet operating income $ 16 30 10 56 10 ? $41 2 $1.000.000 52.110. Required: 1-a. Complete the following table showing the totals. (Enter your answers in whole dollars, not in millions) Answer is complete and correct. 3 search Required: 1-a. Complete the following table showing the totals. (Enter your answers in whole dollars, not in millions.) Answer is complete and correct. Current (no automation Proposed (automation) 88,000 units 133,000 units Per Unit Total Per Unit Total $ 91 $ 8,008,000 s 91 $12, 103,000 $ 16 S 16 30 Production and Sales Volume Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing cost Contribution margin Foed manufacturing costs Net operating income 24 10 10 50 56 35 $ 41 3,080 000 $ $ 1,090,000 $ 1,990.000 5,453,000 $ 2310,000 $ 3,143,000 . be here to search o 3 c - C [The following information applies to the questions displayed below.) Beacon Company is considering automating its production facility. The initial investment in automation would be $2.39 million, and the equipment has a useful life of 6 years with a residual value of $1,030,000. The company will use straight- line depreciation. Beacon could expect a production Increase of 45,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no Proposed automation) (automation) 88,000 units 133,000 units Per Production and sales volume Total Total Sales revenue $ 91 Variable costs Direct materials $ 16 $16 Direct labor 2 Variable manufacturing overhead Total variable sanufacturing costs Contribution margin > 2 Fixed manufacturing costs $ 1.000.000 $ 2,310,000 2 > Net operating income Per $? $ 91 $? 1a 56 $ 35 2. Determine the project's accounting rate of return. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Accounting rate of retum 4253 to search Beacon Company is considering automating its production facility. The initial investment in automation would be $239 million, and the equipment has a useful life of 6 years with a residual value of $1,030,000. The company will use straight- line depreciation. Beacon could expect a production increase of 45,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) 88,000 units Per Unit Total $91 Proposed (automation) 133,000 units Per Unit Total $91 $? $16 $ 16 ? 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 10 56 $ 35 ? $1,000,000 $ 2,310.000 > 3. Determine the project's payback period. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Payback period 1.78 years 10 of 15 o BP M search YHTULEE [The following information applies to the questions displayed below) Beacon Company is considering automating its production facility. The initial investment in automation would be $2.39 million, and the equipment has a useful life of 6 years with a residual value of $1,030,000. The company will use straight- line depreciation. Beacon could expect a production increase of 45,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no Proposed automation) (automation) 88,000 units 133,000 units Per Per Production and sales volume Unit Total Unit Total Sales revenue $ 91 $? Variable costs Direct materials $ 16 $ 16 Direct labor Variable manufacturing overhead Total variable manufacturing costs 56 Contribution margin $ 35 Fixed manufacturing costs $1,000,000 $ 2,310,000 Net operating income 30 10 ? 10 2 ? 4. Using a discount rate of 14 percent, calculate the net present value (NPV) of the proposed investment (Euture Value of $1. Present Value of $1. Euture 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.) Not present value o earch Required mormoon [The following information applies to the questions displayed below.) Beacon Company is considering automating its production facility. The initial investment in automation would be $2.39 million, and the equipment has a useful life of 6 years with a residual value of $1,030,000. The company will use straight line depreciation Beacon could expect a production increase of 45,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) 88,000 units Per Unit Total $91 $ Proposed (automation) 133,000 units Per Unit Total $ 91 $? $ 16 ? 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 $ 16 30 10 56 $ 35 7. $41 $ 2,310.000 ? ? 5. Recalculate the NPV using a 9 percent discount rate. (Future Value $1. Present Value of $1. Euture Value Annuity of $1. Present Value Annully of $1.) (Use appropriate foctor(s) from the tables provided. Negative amount should be indicated by a minus sign. Enter the answer in whole dollars.) Net present value o - arch C tion applies to the questions displayed below.) Falcon Crest Aces (FCA), Inc., is considering the purchase of a small plane to use in its wing-walking demonstrations and aerial tour business. Various information about the proposed Investment follows: Initial investment Useful life Salvage value Annual net income generated FCA's cost of capital $ 270,000 $ 10 years 25,000 $ 8% 6,000 Assume straight line depreciation method is used. quired: lp FCA evaluate this project by calculating each of the following: Accounting rate of return. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Accounting Rate of Return 4.44 O ch TE C Required information [The following information applies to the questions displayed below) Beacon Company is considering automating its production facility. The initial investment in automation would be $7.39 million, and the equipment has a useful life of 6 years with a residual value of $1,030,000. The company will use straight- line depreciation. Beacon could expect a production increase of 45,000 units per year and a reduction of 20 percent in the labor cost per unit Current (no automation) 88,000 units Per Unit Total $ 91 $ Proposed (automation) 133,000 units Per Total $ 91 $? $ 16 Production and sales volume Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing costs Contribution margin Fixed manufacturing costs Niet operating income $ 16 30 10 56 10 ? $41 2 $1.000.000 52.110. Required: 1-a. Complete the following table showing the totals. (Enter your answers in whole dollars, not in millions) Answer is complete and correct. 3 search Required: 1-a. Complete the following table showing the totals. (Enter your answers in whole dollars, not in millions.) Answer is complete and correct. Current (no automation Proposed (automation) 88,000 units 133,000 units Per Unit Total Per Unit Total $ 91 $ 8,008,000 s 91 $12, 103,000 $ 16 S 16 30 Production and Sales Volume Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing cost Contribution margin Foed manufacturing costs Net operating income 24 10 10 50 56 35 $ 41 3,080 000 $ $ 1,090,000 $ 1,990.000 5,453,000 $ 2310,000 $ 3,143,000 . be here to search o 3 c - C [The following information applies to the questions displayed below.) Beacon Company is considering automating its production facility. The initial investment in automation would be $2.39 million, and the equipment has a useful life of 6 years with a residual value of $1,030,000. The company will use straight- line depreciation. Beacon could expect a production Increase of 45,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no Proposed automation) (automation) 88,000 units 133,000 units Per Production and sales volume Total Total Sales revenue $ 91 Variable costs Direct materials $ 16 $16 Direct labor 2 Variable manufacturing overhead Total variable sanufacturing costs Contribution margin > 2 Fixed manufacturing costs $ 1.000.000 $ 2,310,000 2 > Net operating income Per $? $ 91 $? 1a 56 $ 35 2. Determine the project's accounting rate of return. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Accounting rate of retum 4253 to search Beacon Company is considering automating its production facility. The initial investment in automation would be $239 million, and the equipment has a useful life of 6 years with a residual value of $1,030,000. The company will use straight- line depreciation. Beacon could expect a production increase of 45,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) 88,000 units Per Unit Total $91 Proposed (automation) 133,000 units Per Unit Total $91 $? $16 $ 16 ? 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 10 56 $ 35 ? $1,000,000 $ 2,310.000 > 3. Determine the project's payback period. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Payback period 1.78 years 10 of 15 o BP M search YHTULEE [The following information applies to the questions displayed below) Beacon Company is considering automating its production facility. The initial investment in automation would be $2.39 million, and the equipment has a useful life of 6 years with a residual value of $1,030,000. The company will use straight- line depreciation. Beacon could expect a production increase of 45,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no Proposed automation) (automation) 88,000 units 133,000 units Per Per Production and sales volume Unit Total Unit Total Sales revenue $ 91 $? Variable costs Direct materials $ 16 $ 16 Direct labor Variable manufacturing overhead Total variable manufacturing costs 56 Contribution margin $ 35 Fixed manufacturing costs $1,000,000 $ 2,310,000 Net operating income 30 10 ? 10 2 ? 4. Using a discount rate of 14 percent, calculate the net present value (NPV) of the proposed investment (Euture Value of $1. Present Value of $1. Euture 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.) Not present value o earch Required mormoon [The following information applies to the questions displayed below.) Beacon Company is considering automating its production facility. The initial investment in automation would be $2.39 million, and the equipment has a useful life of 6 years with a residual value of $1,030,000. The company will use straight line depreciation Beacon could expect a production increase of 45,000 units per year and a reduction of 20 percent in the labor cost per unit. Current (no automation) 88,000 units Per Unit Total $91 $ Proposed (automation) 133,000 units Per Unit Total $ 91 $? $ 16 ? 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 $ 16 30 10 56 $ 35 7. $41 $ 2,310.000 ? ? 5. Recalculate the NPV using a 9 percent discount rate. (Future Value $1. Present Value of $1. Euture Value Annuity of $1. Present Value Annully of $1.) (Use appropriate foctor(s) from the tables provided. Negative amount should be indicated by a minus sign. Enter the answer in whole dollars.) Net present value o - arch C tion applies to the questions displayed below.) Falcon Crest Aces (FCA), Inc., is considering the purchase of a small plane to use in its wing-walking demonstrations and aerial tour business. Various information about the proposed Investment follows: Initial investment Useful life Salvage value Annual net income generated FCA's cost of capital $ 270,000 $ 10 years 25,000 $ 8% 6,000 Assume straight line depreciation method is used. quired: lp FCA evaluate this project by calculating each of the following: Accounting rate of return. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Accounting Rate of Return 4.44 O ch TE C
