The existing system is capable of producing $100,000$ dishwashers per year. Sales and production data using the existing system are provided by the Accounting Department:

$*$All cash expenses with the exception of depreciation, which is $$6$ per unit. The existing equipment is being depreciated using straight$-$line with no salvage value considered.

The firm's cost of capital is $12$ percent, but management chooses to use $16$ percent as the required rate of return for evaluation of investments. The combined federal and state tax rate is $25$ percent.

The present value tables provided in Exhibit $19$B$.1$ and Exhibit $19$B$.2$ must be used to solve the following problems.

Required:

Compute the net present value for the old system and the automated system. Enter your answers in thousands.

Old system $

New system $,$

Which system would the company choose?

Old system $$

Repeat the net present value analysis of Requirement $1,$ using $12$ percent as the discount rate. Enter your answers in thousands.

Old system $,$$

New system

drop by $10,000$ units per year." Repeat the net present value analysis, using this new information and a $12$ percent discount rate. Enter your answers in thousands.

Old system

information, the information in Requirement $3,$ and a $12$ percent discount rate.

New system

to $NPV=$$

Old system

to $NPV=?$