[The following information applies to the questions displayed below.] Beacon Company is considering automating its production facility. The initial investment in automation would be $9.96 million, and the equipment has a useful life of 8 years with a residual value of $1,000,000. The company will use straight-line depreciation. Beacon could expect a production increase of 33,000 units per year and a reduction of 20 percent in the labor cost per unit. 4. Using a discount rate of 14 percent, calculate the net present value (NPV) of the proposed investment. (Future Value of \$1. Present Value of \$1, Euture Value Annuity of \$1, Present Value Annuity of \$1.) (Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Enter the answer in whole dollars.) TABLE 11.4A Present Value of Annuity of \$1 \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|} \hline Periods' () & 2% & 3% & 3.75% & 4% & 4.25% & 5% & 6% & 7% & 8% \\ \hline 1 & 0.9804 & 0.9709 & 0.9639 & 0.9615 & 0.9592 & 0.9524 & 09434 & 0.9346 & 0.9259 \\ \hline 2 & 1.9416 & 1.9135 & 18929 & 1.8861 & 1.8794 & 18594 & 18334 & 18080 & 1.7833 \\ \hline 3 & 28839 & 28286 & 27883 & 27751 & 2.7620 & 27232 & 26730 & 26243 & 25771 \\ \hline 4 & 3.8077 & 37171 & 3.6514 & 3.6299 & 3.6086 & 35460 & 3.4651 & 33872 & 3.3121 \\ \hline 5 & 47135 & 4.5797 & 4.4833 & 4.4518 & 4.4207 & 43295 & 42124 & 41002 & 3.9927 \\ \hline 6 & 5.6014 & 5.4172 & 5.2851 & 5.2421 & 51997= & 5.0757 & 4.9173 & 47665 & 4.6229 \\ \hline 7 & 6.4720 & 6.2303 & 60579 & 6.0021 & 5.9470 & 57864 & 5.5824 & 53893 & 52064 \\ \hline 8 & 7.3255 & 7.0197 & 6.8028 & 67327 & 6.6638 & 6.4632 & 6.2098 & 59713 & 5.7466 \\ \hline 9 & 8.1622 & 77861 & 75208 & 7.4353 & 73513 & 71078 & 6.8017 & 6.5152 & 6.2469 \\ \hline 10 & 8.9826 & 8.5302 & 82128 & 8.1109 & 80109 & 77217 & 73601 & 70236 & 67101 \\ \hline 20 & 16.3514 & 14.8775 & 13.8962 & 13.5903 & 13.2944 & 12.4622 & 114699 & 105940 & 9.8181 \\ \hline Periods" (9) & 9% & 10% & 11% & 12% & 13% & 14% & 15% & 20% & 25% \\ \hline 1 & 0.9174 & 0.9091 & 0.9009 & 0.8929 & 0.8550 & 0.8772 & 0.8696 & 0.8333 & 0.8000 \\ \hline 2 & 17591 & 17355 & 17125 & 16901 & 16681 & 16467 & 16257 & 15278 & 14400 \\ \hline 3 & 25313 & 24869 & 24437 & 24018 & 23612 & 23216 & 22832 & 21065 & 1.9520 \\ \hline 4 & 3.2397 & 31699 & 3.1024 & 3.0373 & 29745 & 29137 & 28550 & 25887 & 23616 \\ \hline 5 & 3.8897 & 37908 & 3.6959 & 3.6048 & 3.5172 & 3.4331 & 33522 & 29906 & 26893 \\ \hline 6 & 4.4859 & 4.3553 & 4.2305 & 41114 & 39975 & 3.8887 & 3.7845 & 33255 & 2.9514 \\ \hline 7 & 5.0330 & 48684 & 47122 & 4.5638 & 4.4226 & 42883 & 41604 & 36046 & 3.1611 \\ \hline 8 & 5.5348 & 53349 & 51461 & 4.9676 & 47988 & 46389 & 4.4873 & 3.8372 & 33289 \\ \hline 9 & 5.9952 & 57590 & 5.5370 & 5.3282 & 51317 & 4.9464 & 47716 & 4.0310 & 3.4631 \\ \hline 10 & 6.4177 & 61446 & 5.8892 & 56502 & 5.4262 & 5.2161 & 5.0188 & 4.1925 & 3.5705 \\ \hline 20 & 91285 & 85136 & 7.9633 & 7.4694 & 70248 & 6.6231 & 6.2593 & 48696 & 3.9539 \\ \hline \end{tabular} There is one poyment esch period. Beacon Company is considering automating its production facility. The initial investment in automation would be $9.96 million, and the equipment has a useful life of 8 years with a residual value of $1,000,000. The company will use straight-line depreciation. Beacon could expect a production increase of 33,000 units per year and a reduction of 20 percent in the labor cost per unit. 5. Recalculate the NPV using a 9 percent 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. Negative amount should be indicated by a minus sign. Enter the answer in whole dollars.)
