take several months and will partally disrupt production. The firm has just completed a $50,000 feasibility study to andyze the decison to buy the XC-750, tesuting in the following estimates: - Marketing: Once the XC-750 is operating next year, the extra capacity is expectod to generate $10 milion per year in additional sales, which will cortinue for the tes-year ife of the inactine. expected to be 70% of their sale price. The increased preduction will a'so require increased inventory on hand of $1 milion duting the the of the project. The incrossed producton wit requie additional inventory of $1 milion, to be added in year 0 and depleted in yeac 10. - Human Resources: The expansion will require add tional saies and administrative personinel at a cost of $2 milion par year. - Accounting: The XC-750 will be depreciated via the straight-line methed in years 1-10. Recevables are expected to be 15% of revenues and payables 10 be 10% of the cort of gosds oold Bilingham's marginal corporate tax rate is 15%. a. Determine the incremental earnings from the purchase of the XC-750. b. Doternine the free cash flow trom the purchase of the XCTiso: c. If the appropriate cost of capital for the expansion is 10.0%, compute the NPV of the purchase. d. While the expected new sales will be $10 milien pet year from the expansion, esfimates tange fom 58 milion to $12 mition. What is ene NPV n fie wont case? in ine bett case? e. What is the break-even level of new saies from the expansion? What is the break-even level for the cout of goods sold as a percentage of saies? a. Determine the incremertal earnings from the purchase of the 0.750 Calculate the incremental eamings from the purchase of the C750 telow: (Round to the neares dellaf.)