Beacon Company is considering automating its production facility. The initial investment in automation would be $\backslash (\backslash$$ $10\mathrm{.}90\backslash )$ million, and the equipment has a useful life of $9$ years with a residual value of $\backslash (\backslash$$ $1,180,000\backslash ).$ The company will use straightline depreciation. Beacon could expect a production increase of $49,000$ units per year and a reduction of $20$ percent in the labor cost per unit.

Required:

$1-$a$.$ Complete the following table showing the totals.

$1-$b$.$ Does Beacon Company favor automation?

Complete this question by entering your answers in the tabs below.

Complete the following table showing the totals.

Note: Enter your answers in whole dollars, not in millions. $!$

Required information

$[$The following information applies to the questions displayed below.$]$

Beacon Company is considering automating its production facility. The initial investment in automation would be $\backslash (\backslash$$ $10\mathrm{.}90\backslash )$ million, and the equipment has a useful life of $9$ years with a residual value of $\backslash (\backslash$$ $1,180,000\backslash ).$ The company will use straightline depreciation. Beacon could expect a production increase of $49,000$ units per year and a reduction of $20$ percent in the labor cost per unit.

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|$c$|$c$|\}$

$\backslash$hline $\backslash$multirow$[$b$]\{2\}\{*\}\{$Production and sales volume$\}$ & $\backslash$multicolumn$\{4\}\{|$l$|\}\{```$

Current $($no automation$)78,000$ Proposed $($automation$)127,000$

units units

$```\}\backslash \backslash$

$\backslash$hline & Per Unit & Total & Per Unit & Total $\backslash \backslash$

$\backslash$hline Sales revenue & $\backslash$$ $96$ & $\backslash$$ $?$ & $\backslash$$ $96$ & $\backslash$$ $?\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{5\}\{|$l$|\}\{$Variable costs$\}\backslash \backslash$

$\backslash$hline Direct materials & $\backslash$$ $15$ & & $\backslash$$ $15$ & $\backslash \backslash$

$\backslash$hline Direct labor & $30$ & & $?$ & $\backslash \backslash$

$\backslash$hline Variable manufacturing overhead & $11$ & & $11$ & $\backslash \backslash$

$\backslash$hline Total variable manufacturing costs & $56$ & & $?$ & $\backslash \backslash$

$\backslash$hline Contribution margin & $\backslash$$ $40$ & $?$ & $\backslash$$ $46$ & $?\backslash \backslash$

$\backslash$hline Fixed manufacturing costs & & $1,230,000$ & & $2,250,000\backslash \backslash$

$\backslash$hline Net operating income & & $?$ & & $?\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

Required:

$2.$ Determine the project's accounting rate of return.

Note: Round your answer to $\backslash (\backslash$mathbf$\{2\}\backslash )$ decimal places.

Accounting rate of return

$\backslash \%$ Required information

$[$The following information applies to the questions displayed below.$]$

Beacon Company is considering automating its production facility. The initial investment in automation would be $\backslash (\backslash$$ $10\mathrm{.}90\backslash )$ million, and the equipment has a useful life of $9$ years with a residual value of $\backslash (\backslash$$ $1,180,000\backslash ).$ The company will use straightline depreciation. Beacon could expect a production increase of $49,000$ units per year and a reduction of $20$ percent in the labor cost per unit.

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|$c$|$c$|\}$

$\backslash$hline $\backslash$multirow$[$b$]\{2\}\{*\}\{$Production and sales volume$\}$ & $\backslash$multicolumn$\{4\}\{|$l$|\}\{```$

Current $($no automation$)78,000$ Proposed $($automation$)127,000$

units units

$```\}\backslash \backslash$

$\backslash$hline & Per Unit & Total & Per Unit & Total $\backslash \backslash$

$\backslash$hline Sales revenue & $\backslash$$ $96$ & $\backslash$$ $?$ & $\backslash$$ $96$ & $\backslash$$ $?\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{5\}\{|$l$|\}\{$Variable costs$\}\backslash \backslash$

$\backslash$hline Direct materials & $\backslash$$ $15$ & & $\backslash$$ $15$ & $\backslash \backslash$

$\backslash$hline Direct labor & $30$ & & $?$ & $\backslash \backslash$

$\backslash$hline Variable manufacturing overhead & $11$ & & $11$ & $\backslash \backslash$

$\backslash$hline Total variable manufacturing costs & $56$ & & $?$ & $\backslash \backslash$

$\backslash$hline Contribution margin & $\backslash$$ $40$ & $?$ & $\backslash$$ $46$ & $?\backslash \backslash$

$\backslash$hline Fixed manufacturing costs & & $1,230,000$ & & $2,250,000\backslash \backslash$

$\backslash$hline Net operating income & & $?$ & & $?\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

Required:

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

Note: Round your answer to $\backslash (\backslash$mathbf$\{2\}\backslash )$ decimal places.

Payback period

years $\backslash (!\backslash )$

Required information

$[$The following information applies to the questions displayed below.$]$

Beacon Company is considering automating its production facility. The initial investment in automation would be $\backslash (\backslash$$ $10\mathrm{.}90\backslash )$ million, and the equipment has a useful life of $9$ years with a residual value of $\backslash (\backslash$$ $1,180,000\backslash ).$ The company will use straightline depreciation. Beacon could expect a production increase of $49,000$ units per year and a reduction of $20$ percent in the labor cost per unit.

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|$c$|$c$|\}$

$\backslash$hline $\backslash$multirow$[$b$]\{2\}\{*\}\{$Production and sales volume$\}$ & $\backslash$multicolumn$\{4\}\{|$l$|\}\{```$

Current $($no automation$)78,000$ Proposed $($automation$)127,000$

units units

$```\}\backslash \backslash$

$\backslash$hline & Per Unit & Total & Per Unit & Total $\backslash \backslash$

$\backslash$hline Sales revenue & $\backslash$$ $96$ & $\backslash$$ $?$ & $\backslash$$ $96$ & $\backslash$$ $?\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{5\}\{|$l$|\}\{$Variable costs$\}\backslash \backslash$

$\backslash$hline Direct materials & $\backslash$$ $15$ & & $\backslash$$ $15$ & $\backslash \backslash$

$\backslash$hline Direct labor & $30$ & & $?$ & $\backslash \backslash$

$\backslash$hline Variable manufacturing overhead & $11$ & & $11$ & $\backslash \backslash$

$\backslash$hline Total variable manufacturing costs & $56$ & & $?$ & $\backslash \backslash$

$\backslash$hline Contribution margin & $\backslash$$ $40$ & $?$ & $\backslash$$ $46$ & $?\backslash \backslash$

$\backslash$hline Fixed manufacturing costs & & $1,230,000$ & & $2,250,000\backslash \backslash$

$\backslash$hline Net operating income & & $?$ & & $?\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

Required:

$4.$ Using a discount rate of $15$ percent, calculate the net present value $($NPV$)$ of the proposed investment. $($Future Value of $\backslash$$$1,$ Present Value of $\backslash$$$1,$ Future Value Annuity of $\backslash$$$1,$ Present Value Annuity of $\backslash$$$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