Question: Can you please help me with this question? i got it wrong. Thank You! Beacon Company is considering automating its production facility. The initial investment
Can you please help me with this question? i got it wrong.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 Current (no automation) Proposed (automation) 80,000 units 120,000 units Per Per Total Total Production and sales volume Unit Unit Sales revenue $ 90 $ ? $ 90 $ Variable costs Direct materials $ 18 $ 18 Direct labor 25 2 Variable manufacturing overhead 10 10 Total variable manufacturing costs 53 ? Contribution margin $ 37 ? $ 42 ? Fixed manufacturing costs $ 1,250,000 $ 2,350,000 Net operating income 2 ? 2 PA11-2 Part 5 5. Recalculate the NPV using a 10 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. Enter the answer in whole dollars.) Not present value $ 125,350
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