The following information applies to the questions displayed below.] Beacon Company is considering automating its production facility. The initial investment in automation would be $7.59 million, and the equipment has a useful life of 6 years with a residual value of $1,110,000. The company will use straight-line depreciation. Beacon could expect a production increase of 32,000 units per year and a reduction of 20 percent in the labor cost per unit.

	Current (no automation)			Proposed (automation)
Production and sales volume	74,000 units			106,000 units
	Per Unit		Total	Per Unit		Total
Sales revenue	$	95	?	$	95	?
Variable costs
Direct materials	$	19		$	19
Direct labor		20			?
Variable manufacturing overhead		10			10
Total variable manufacturing costs		49			?
Contribution margin	$	46	?	$	50	?
Fixed manufacturing costs			$ 1,130,000			$ 2,220,000
Net operating income			?			?

Current (no automation)			Proposed (automation)
Production and Sales Volume	$74,000	Units	$106,000	Units
	Per Unit	Total	Per Unit	Total
Sales Revenue	$95	$7,030,000	$95	$10,070,000
Variable Costs:
Direct Materials	$19		$19
Direct Labor	20		16
Variable Manufacturing Overhead	10		10
Total Variable Manufacturing Costs	49		45
Contribution Margin	$46	3,404,000	$50	5,300,000
Fixed Manufacturing Costs		$1,130,000		2,220,000
Net Operating Income		$2,274,000		$3,080,000

2. Determine the project's accounting rate of return. (Round your answer to 2 decimal places.) 3. Determine the project's payback period. (Round your answer to 2 decimal places.)