Billingham Packaging in considering expanding its preduction capacily by purchasing a new machire, the XC-750. The cost of the XC-750 is $2.83 million. Unfortunately, instaling this machine will take several months and wil partialy disrupt production. The firm has just completed a $47,000 feasibility study to analyze the decision to buy the XC-750. resulting in the following estimates: * Marketing Once the XC-750 is operational nextyeat, the extra capacity is expectod to generate $10.20 milion per year in additional sales, which will continue for the 10 -year Mife of the machine. - Operatons. The disruption caused by the installation wail decrease sales by 55.04 milllon this year As with Billingham's existing products, the cost of goods for the products prodaced by the XC-750 is expected to be 74% of their salo price. The increased production wil also reguire increased imventory on hand of $1.14milil on during the lifo of the project, including year 0 . - Human Resoures The expansion will require additional sales and administrative personnel at a cost of 5197 million per year. - Accounting The XC-750 wil be depreciated via the thraight tine method over the 10 -year life of the machine. The flum expects receivables from the now sales to be to 7 of of revenues and payables to be 9% of the cest of goods sold. Bitingham's marginal corporate tax tate is 21 ts a. Determine the incremental earnings from the purchase of the XC-750 b. Determine the free cash flow from the parchase of the XC. 750 c. If the apbreoriate cost of cabital for the expanpion is 97%. combute the NPV of the turchase. a. Determine the incremental earnings from the purchase of the XC750 Coiculate the incrementel eamings from the purchase of the XC-750 below (with vs without XC?750) (Round to the nearest dollar) Incremental Eflects (with vs. without XC.750)