Beacon Company is considering automating its production facility. The initial investment in automation would be $$9\mathrm{.}90$ million, and the equipment has a useful life of $8$ years with a residual value of $$1,100,000.$ The company will use straightline depreciation. Beacon could expect a production increase of $36,000$ units per year and a reduction of $20$ percent in the labor cost per unit.

Required:

$3.$ Determine the project's payback period.

Note: Round your answer to $2$ decimal places.

Payback period

years

Required:

$4.$ Using a discount rate of $13$ percent, calculate the net present value $($NPV$)$ of the proposed investment. $($Future Value of $$1,$ Present Value of $$1,$ Future Value Annuity of $$1,$ Present Value Annuity of $$1.)$

Note: Use appropriate factor$($s$)$ from the tables provided. Negative amount should be indicated by a minus sign. Enter the answer in whole dollars.

Net present value

Required:

$5.$ Recalculate the NPV using a $8$ percent discount rate. $($Future Value of $$1,$ Present Value of $$1,$ Future Value Annuity of $$1,$ Present Value Annuity of $$1.)$

Note: Use appropriate factor$($s$)$ from the tables provided. Negative amount should be indicated by a minus sign. Enter the answer in whole dollars.

Net present valueBeacon Company is considering automating its production facility. The initial investment in automation would be $$9\mathrm{.}90$ million, and the equipment has a useful life of $8$ years with a residual value of $$1,100,000.$ The company will use straightline depreciation. Beacon could expect a production increase of $36,000$ units per year and a reduction of $20$ percent in the labor cost per unit.

Required:

$3.$ Determine the project's payback period.

Note: Round your answer to $2$ decimal places.

Payback period

years

Required:

$4.$ Using a discount rate of $13$ percent, calculate the net present value $($NPV$)$ of the proposed investment. $($Future Value of $$1,$ Present Value of $$1,$ Future Value Annuity of $$1,$ Present Value Annuity of $$1.)$

Note: Use appropriate factor$($s$)$ from the tables provided. Negative amount should be indicated by a minus sign. Enter the answer in whole dollars.

Net present value

Required:

$5.$ Recalculate the NPV using a $8$ percent discount rate. $($Future Value of $$1,$ Present Value of $$1,$ Future Value Annuity of $$1,$ Present Value Annuity of $$1.)$

Note: Use appropriate factor$($s$)$ from the tables provided. Negative amount should be indicated by a minus sign. Enter the answer in whole dollars.

Net present value