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 $15 million, and the equipment has a useful life of 10 years with a residual value of $500,000. The company will use straight line depreciation Beacon could expect a production increase of 40,000 units per year and a reduction of 20 percent in the labor cost per unit Production and sales volume Current (no automation) 50,000 units Per Unit Total $.90 2 Proposed (automation) 120,000 units Per Total Unit $90 ? $18 Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing costs Contribution margin Fixed manufacturing costs Net operating income $18 25 10 53 $3 10 > $.42 $1,250,000 ? 7 $ 2,350.000 3. Determine the project's payback period. (Round your answer to 2 decimal places.)