take several months and wit partally diarupt production. The fem has just compleled a $46,000 feasiblity study to analyze the decision to buy the C750, tesulting in the foliowing estimates - Markeling Once the XC-750 is operasonal next year, the extra capacity is oxpectod to gonerate $10.15 millon por year in additional sales, which will continue for the 10 year ife of the machine. - Operations, The disruption caused by the installation will decrease sales by $4.92 milion this year. As with Balingham's existing products, the cost of goods for the products produced by the XC-75 is expected to be 74 sho of their sale price. The - Human Resources: The expantion will require additional sales and administrative personnel at a colt of $1.98 milion per year. to be 11\% of the cost of gocds sold. Bulinghamis marginal corporate tax fate is 21%. a. Delertine the incremenal earings from the purchase of the XC-750. b. Delermine the froe cash fow from the purchase of the Xe-750. c, if the appropriale cost of caphlal for the expandion is 9.5%. compule the NPV of the purchase: 4. What is the Desak-even levet of new sales from the expanaion? What is the breakeven fevel tor the cost of goods soid? but would alow for addifional sales in years 3 through 10 . What level of addtional sales (above the $10.15 mition wespecled for the XC.750) per year in those years would justity purchaking the larger machine? take several months and wit partally diarupt production. The fem has just compleled a $46,000 feasiblity study to analyze the decision to buy the C750, tesulting in the foliowing estimates - Markeling Once the XC-750 is operasonal next year, the extra capacity is oxpectod to gonerate $10.15 millon por year in additional sales, which will continue for the 10 year ife of the machine. - Operations, The disruption caused by the installation will decrease sales by $4.92 milion this year. As with Balingham's existing products, the cost of goods for the products produced by the XC-75 is expected to be 74 sho of their sale price. The - Human Resources: The expantion will require additional sales and administrative personnel at a colt of $1.98 milion per year. to be 11\% of the cost of gocds sold. Bulinghamis marginal corporate tax fate is 21%. a. Delertine the incremenal earings from the purchase of the XC-750. b. Delermine the froe cash fow from the purchase of the Xe-750. c, if the appropriale cost of caphlal for the expandion is 9.5%. compule the NPV of the purchase: 4. What is the Desak-even levet of new sales from the expanaion? What is the breakeven fevel tor the cost of goods soid? but would alow for addifional sales in years 3 through 10 . What level of addtional sales (above the $10.15 mition wespecled for the XC.750) per year in those years would justity purchaking the larger machine
