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 (60 automation 30.000 unit Pec Unit Total 5 90 7 Proposed automation 120.000 Per unt Total 90 Sales revenue Variable costs Direct materials Direct Labor Variable manufacturing overhead Total variable manufacturing costs Contribution margin Fixed manufacturing costs Net operating income 20 25 10 53 32 10 $ 42 31.250,000 2 LESERSO. Production and Sales Volume Current (no automation) Proposed (automation) 80,000 Units 120,000 Units Per Unit Total Per Unit Total Sales Revenue $ 90 (7 187,963) $ 90 $ 42 $ 18 $ NICO 25 10 Variable Costs: Direct Materials Direct Labor Variable Manufacturing Overhead Total Variable Manufacturing Costs Contribution Margin Fixed Manufacturing Costs Net Operating Income 10 53 $ 3 37 $ 42 1,250,000 $ 7,187,963 2,350,000 1-b. Does Beacon Company favor automation? Yes O No 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) 80,000 units Per Total Unit $ 90 Proposed automation) 120,000 units Per Unit Total $98 $ 5 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 37 18 7 1e $ $ 42 $1,250,000 $2,350.000 2 Determine the project's accounting rate of return. (Round your answer to 2 decimal places.) Accounting Rate of Raut % Required information The following information applies to the questions displayed below Seacon Companys considenng automating its production facility. The intal investment in automation wouid be $15 milion and the equipment has a useful fe of 10 years with a residual value of $500.000. The company will use straight- line depreciation Beacon could expects production increase of 40,000 units per year and a reduction of 20 percent in the labor cost per unit Production and les volume Current no sutomation 3.00 units Per Total $ 90 Proposed automat 20. Per Un Total $ 90 3 $ 18 Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Toto Nariable snufacturing Contribution margin Fixed manufacturing COSES Net operating Income 18 25 1e 53 37 10 5 62 $ 1.250.000 Si5.000 3. Determine the project's payback period. Round your answer to 2 decimal places Pone Pani Years 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 milion, 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) 30,000 units Per Total Unit $ 90 Proposed (automation) 120,000 units Per Unit Total $90 2 5 Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing costs Contribution margin Fived manufacturing costs Net operating Income $ 10 25 10 53 $ 37 10 > 10 ? 42 $ $1,250,000 2 5 2.250,000 4. Using a discount rate of 15 percent, calculate the net present value (NPV) of the proposed investment (Future Value of $1. Present Volue of $1. Future Value Annully of Si. Present Value Annuity of S1) (Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Enter the answer in whole dollars.) Net Presentato Required information [The following information applies to the questions displayed below.) 5 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 30,000 unts Per Unit Total 590 2 Proposed (automation) 120,000 units Per Unit Total $ 90 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 $ 32 $ 18 2 10 2 542 $ 1,250,000 52350.000 5. Recalculate the NPV using a 10% discount rate. (Future Value of St. Present Value of St. Future Value Annuity of S1. Present Value Annuity of S1) (Use appropriate factor(s) from the tables provided, Enter the answer in whole dollars.) Net Pront au