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 Total Unit $ 90 $ 18 $ 18 25 Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing costs Contribution margin Fixed manufacturing costs Net operating income 10 53 $ 37 S42 $ 1,250,000 $ 2,350,000 5. Recalculate the NPV using a 10% 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. Enter the answer in whole dollars.) Answer is complete but not entirely correct. Net Present Value $ 124,857 TABLE 11.1A Future Value of $1 Periods 2% 3% 3.75% 4% 4.25% 5% 6% 7% 8% O-MOON 0009 1.0000 1.0200 1.0404 1.0612 1.0824 1.1041 1.1262 1.1487 1.1717 1.1951 1.2190 1.4859 1.0000 1.0300 1.0609 1.0927 1.1255 1.1593 1.1941 1.2299 1.2668 1.3048 1.3439 1.8061 1.0000 1.0375 1.0764 1.1168 1.1587 1.2021 1.2472 1.2939 1.3425 1.3928 1.4450 2.0882 1.0000 1.0400 1.0816 1.1249 1.1699 1.2167 1.2653 1.3159 1.3686 1.4233 1.4802 2.1911 1.0000 1.0425 1.0868 1.1330 1.1811 1.2313 1.2837 1.3382 1.3951 1.4544 1.5162 2.2989 1.0000 1.0500 1.1025 1.1576 1.2155 1.2763 1.3401 1.4071 1.4775 1.5513 1.6289 2.6533 1.0000 1.0600 1.1236 1.1910 1.2625 1.3382 1.4185 1.5036 1.5938 1.6895 1.7906 3.2071 1.0000 1.0700 1.1449 1.2250 1.3108 1.4026 1.5007 1.6058 1.7182 1.8385 1.9672 3.8697 1.0000 1.0800 1.1664 1.2597 1.3605 1.4693 1.5869 1.7138 1.8509 1.9990 2.1589 4.6610 Periods 9% 10% 11% 12% 13% 14% 15% 20% 25% 8000 vaWN-O 1.0000 1.0900 1.1881 1.2950 1.4116 1.5386 1.6771 1.8280 1.9926 2. 1719 2.3674 5.6044 1.0000 1.1000 1.2100 1.3310 1.4641 1.6105 1.7716 1.9487 2.1436 2.3579 2.5937 6.7275 1.0000 1.1100 1.2321 1.3676 1.5181 1.6851 1.8704 2.0762 2.3045 2.5580 2.8394 8.0623 1.0000 1.1200 1.2544 1.4049 1.5735 1.7623 1.9738 2.2107 2.4760 2.7731 3.1058 9.6463 1.0000 1.1300 1.2769 1.4429 1.6305 1.8424 2.0820 2.3526 2.6584 3.0040 3.3946 11.5231 1.0000 1.1400 1.2996 1.4815 1.6890 1.9254 2.1950 2.5023 2.8526 3.2519 3.7072 13.7435 1.0000 1.1500 1.3225 1.5209 1.7490 2.0114 2.3131 2.6600 3.0590 3.5179 4.0456 16.3665 1.0000 1.2000 1.4400 1.7280 2.0736 2.4883 2.9860 3.5832 4.2998 5.1598 6.1917 38.3376 1.0000 1.2500 1.5625 1.9531 2.4414 3.0518 3.8147 4.7684 5.9605 7.4506 9.3132 86.7362 TABLE 11.2 A Present Value of $1 Periods 2% 3% 3.75% 4% 4.25% 5% 6% 7% 8% O 000 van WN- 0.9804 0.9612 0.9423 0.9238 0.9057 0.8880 0.8706 0.8535 0.8368 0.8203 0.6730 0.9709 0.9426 0.9151 0.8885 0.8626 0.8375 0.8131 0.7894 0.7664 0.7441 0.5537 0.9639 0.9290 0.8954 0.8631 0.8319 0.8018 0.7728 0.7449 0.7180 0.6920 0.4789 0.9615 0.9246 0.8890 0.8548 0.8219 0.7903 0.7599 0.7307 0.7026 0.6756 0.4564 0.9592 0.9201 0.8826 0.8466 0.8121 0.7790 0.7473 0.7168 0.6876 0.6595 0.4350 0.9524 0.9070 0.8638 0.8227 0.7835 0.7462 0.7107 0.6768 0.6446 0.6139 0.3769 0.9434 0.8900 0.8396 0.7921 0.7473 0.7050 0.6651 0.6274 0.5919 0.5584 0.3118 0.9346 0.8734 0.8163 0.7629 0.7130 0.6663 0.6227 0.5820 0.5439 0.5083 0.2584 0.9259 0.8573 0.7938 0.7350 0.6806 0.6302 0.5835 0.5403 0.5002 0.4632 0.2145 Periods 9% 10% 12% 13% 14% 15% 20% 25% 0.9174 0.8417 0.7722 0.7084 0.6499 0.5963 0.5470 0.5019 0.4604 0.4224 0.1784 0.9091 0.8264 0.7513 0.6830 0.6209 0.5645 0.5132 0.4665 0.4241 0.3855 0.1486 11% 0.9009 0.8116 0.7312 0.6587 0.5935 0.5346 0.4817 0.4339 0.3909 0.3522 0.1240 0.8929 0.7972 0.7118 0.6355 0.5674 0.5066 0.4523 0.4039 0.3606 0.3220 0.1037 0.8850 0.7831 0.6931 0.6133 0.5428 0.4803 0.4251 0.3762 0.3329 0.2946 0.0868 0.8772 0.7695 0.6750 0.5921 0.5194 0.4556 0.3996 0.3506 0.3075 0.2697 0.0728 0.8696 0.7561 0.6575 0.5718 0.4972 0.4323 0.3759 0.3269 0.2843 0.2472 0.0611 0.8333 0.6944 0.5787 0.4823 0.4019 0.3349 0.2791 0.2326 0.1938 0.1615 0.0261 0.8000 0.6400 0.5120 0.4096 0.3277 0.2621 0.2097 0.1678 0.1342 0.1074 0.0115 TABLE 11.3A Future Value of an Annuity of $1 Periods* 2% 3% 3.75% 4% 4.25% 5% 6% 7% 8% ooo van WN- 1.0000 2.0200 3.0604 4.1216 5.2040 6.3061 7.4343 8.5830 9.7546 10.9497 24.2974 9% 1.0000 2.0300 3.0909 4.1836 5.3091 6.4684 7.6625 8.8923 10.1591 11.4639 26.8704 10% 1.0000 2.0375 3.1139 4.2307 5.3893 6.5914 7.8386 9.1326 10.4750 11.8678 29.0174 11% 1.0000 2.0400 3.1216 4.2465 5.4163 6.6330 7.8983 9.2142 10.5828 12.0061 29.7781 12% 1.0000 2.0425 3.1293 4.2623 5.4434 6.6748 7.9585 9.2967 10.6918 12.1462 30.5625 13% 1.0000 2.0500 3.1525 4.3101 5.5256 6.8019 8.1420 9.5491 11.0266 12.5779 33.0660 14% 1.0000 2.0600 3.1836 4.3746 5.6371 6.9753 8.3938 9.8975 11.4913 13.1808 36.7856 15% 1.0000 2.0700 3.2149 4.4399 5.7 507 7.1533 8.6540 10.2598 11.9780 13.8164 40.9955 20% 1.0000 2.0800 3.2464 4.5061 5.8666 7.3359 8.9228 10.6366 12.4876 14.4866 45.7620 25% Periods* 1.0000 2.0900 3.2781 4.5731 5.9847 7.5233 9.2004 11.0285 13.0210 15.1929 51.1601 1.0000 2.1000 3.3100 4.6410 6.1051 7.7156 9.4872 11.4359 13.5975 15.9374 57.2750 1.0000 2.1100 3.3421 4.7097 6.2278 7.9129 9.7833 11.8594 14.1640 16.7220 64.2028 1.0000 2.1200 3.3744 4.7793 6.3528 8.1152 10.0890 12.2997 14.7757 17.5487 72.0524 1.0000 2. 1300 3.4069 4.8498 6.4803 8.3227 10.4047 12.7573 15.4157 18.4197 80.9468 1.0000 2.1400 3.4396 4.9211 6.6101 8.5355 10.7305 13.2328 16.0853 19.3373 91.0249 1.0000 2.1500 3.4725 4.9934 6.7424 8.7537 11.0668 13.7266 16.7856 20.3037 102.4436 1.0000 2.2000 3.6400 5.3680 7.4416 9.9299 12.9159 16.4991 20.7989 25.9587 186.6880 1.0000 2.2500 3.8125 5.7656 8.2070 11.2588 15.0735 19.8419 25.8023 33.2529 342.9447 * There is one payment each period. TABLE 11.4A Present Value of Annuity of $1 Periods 2% 3% 3.75% 4% 4.25% 5% 6% 7% 8% NO a 98 0.9804 1.9416 2.8839 3.8077 4.7135 5.6014 6.4720 7.3255 8.1622 8.9826 16.3514 0.9709 1.9135 2.8286 3.7171 4.5797 5.4172 6.2303 7.0197 7.7861 8.5302 14.8775 0.9639 1.8929 2.7883 3.6514 4.4833 5.2851 6.0579 6.8028 7.5208 8.2128 13.8962 0.9615 1.8861 2.7751 3.6299 4.4518 5.2421 6.0021 6.7327 7.4353 8.1109 13.5903 0.9592 1.8794 2.7620 3.6086 4.4207 5.1997 5.9470 6.6638 7.3513 8.0109 13.2944 0.9524 1.8594 2.7232 3.5460 4.3295 5.0757 5.7864 6.4632 7.1078 7.7217 12.4622 0.9434 1.8334 2.6730 3.4651 4.2124 4.9173 5.5824 6.2098 6.8017 7.3601 11.4699 0.9346 1.8080 2.6243 3.3872 4.1002 4.7665 5.3893 5.9713 6.5152 7.0236 10.5940 0.9259 1.7833 2.5771 3.3121 3.9927 4.6229 5.2064 5.7466 6.2469 6.7101 9.8181 Periods* 9% 10% 11% 12% 13% 14% 15% 20% 25% N ON a 98 0.9174 1.7591 2.5313 3.2397 3.8897 4.4859 5.0330 5.5348 5.9952 6.4177 9.1285 0.9091 1.7355 2.4869 3.1699 3.7908 4.3553 4.8684 5.3349 5.7590 6.1446 8.5136 0.9009 1.7125 2.4437 3.1024 3.6959 4.2305 4.7122 5.1461 5.5370 5.8892 7.9633 0.8929 1.6901 2.4018 3.0373 3.6048 4.1114 4.5638 4.9676 5.3282 5.6502 7.4694 0.8550 1.6681 2.3612 2.9745 3.5172 3.9975 4.4226 4.7988 5.1317 5.4262 7.0248 0.8772 1.6467 2.3216 2.9137 3.4331 3.8887 4.2883 4.6389 4.9464 5.2161 6.6231 0.8696 1.6257 2.2832 2.8550 3.3522 3.7845 4.1604 4.4873 4.7716 5.0188 6.2593 0.8333 1.5278 2.1065 2.5887 2.9906 3.3255 3.6046 3.8372 4.0310 4.1925 4.8696 0.8000 1.4400 1.9520 2.3616 2.6893 2.9514 3.1611 3.3289 3.4631 3.5705 3.9539 * There is one payment each period