Determine the project's accounting rate of return. Accounting rate of return: __% 3. Determine the project's...

 

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Determine the project's accounting rate of return. Accounting rate of return: __% 3. Determine the project's payback period. Payback period: years 4. Using a discount rate of 15 percent, calculate the net present value (NPV) of the proposed investment Net present value: ___ 5. Recalculate the NPV using a 10 percent discount rate. Net present value: ___ Beacon Company is considering automating its production facility. The initial investment in automation would be $15 million, and the equipment has a useful life of 10 years with a residual value of $500,000. The company will use straight- line depreciation. Beacon could expect a production increase of 40,000 units per year and a reduction of 20 percent in the labor cost per unit. Production and sales volume Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing costs Contribution margin Fixed manufacturing costs Net operating income. Current (no automation) 80,00e Proposed (automation) 120,000 units units Per Unit $.90 $18 25 10 53 $ 37 Total $? ? 1,250,000 ? Per Unit $.90 $18 ? 10 ? $ 42 Total $? ? 2,350,000 ? Determine the project's accounting rate of return. Accounting rate of return: __% 3. Determine the project's payback period. Payback period: years 4. Using a discount rate of 15 percent, calculate the net present value (NPV) of the proposed investment Net present value:___ 5. Recalculate the NPV using a 10 percent discount rate. Net present value:___ Beacon Company is considering automating its production facility. The initial investment in automation would be $15 million, and the equipment has a useful life of 10 years with a residual value of $500,000. The company will use straight- line depreciation. Beacon could expect a production increase of 40,000 units per year and a reduction of 20 percent in the labor cost per unit. Production and sales volume Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing costs Contribution margin Fixed manufacturing costs Net operating income. Current (no automation) 80,00e Proposed (automation) 128,000 units units Per Unit $.90 $18 25 10 53 $ 37 Total $? ? 1,250,000 ? Per Unit $.90 $18 ? 10 ? $ 42 Total $? ? 2,350,000 ? Determine the project's accounting rate of return. Accounting rate of return: __% 3. Determine the project's payback period. Payback period: years 4. Using a discount rate of 15 percent, calculate the net present value (NPV) of the proposed investment Net present value: ___ 5. Recalculate the NPV using a 10 percent discount rate. Net present value: ___ Beacon Company is considering automating its production facility. The initial investment in automation would be $15 million, and the equipment has a useful life of 10 years with a residual value of $500,000. The company will use straight- line depreciation. Beacon could expect a production increase of 40,000 units per year and a reduction of 20 percent in the labor cost per unit. Production and sales volume Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing costs Contribution margin Fixed manufacturing costs Net operating income. Current (no automation) 80,00e Proposed (automation) 120,000 units units Per Unit $.90 $18 25 10 53 $ 37 Total $? ? 1,250,000 ? Per Unit $.90 $18 ? 10 ? $ 42 Total $? ? 2,350,000 ? Determine the project's accounting rate of return. Accounting rate of return: __% 3. Determine the project's payback period. Payback period: years 4. Using a discount rate of 15 percent, calculate the net present value (NPV) of the proposed investment Net present value:___ 5. Recalculate the NPV using a 10 percent discount rate. Net present value:___ Beacon Company is considering automating its production facility. The initial investment in automation would be $15 million, and the equipment has a useful life of 10 years with a residual value of $500,000. The company will use straight- line depreciation. Beacon could expect a production increase of 40,000 units per year and a reduction of 20 percent in the labor cost per unit. Production and sales volume Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing costs Contribution margin Fixed manufacturing costs Net operating income. Current (no automation) 80,00e Proposed (automation) 128,000 units units Per Unit $.90 $18 25 10 53 $ 37 Total $? ? 1,250,000 ? Per Unit $.90 $18 ? 10 ? $ 42 Total $? ? 2,350,000 ?

Answer rating: 100% (QA)

Given the provided information lets calculate the accounting rate of return payback period and net present value NPV at a 15 percent discount rate and ... View the full answer