Raghubhai 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 $11.45million, and the equipment has a useful life of 9 years with a residual value of $1,100,000. The company will use straight-line depreciation. Beacon could expect a production increase of 46,000 units per year and a reduction of 20 percent inthe labor cost per unit.Production and sales volumeSales revenueVariable costsDirect materialsDirect laborVariable manufacturing overheadTotal variable manufacturing costsContribution marginFixed manufacturing costsNet operating incomeCurrent (noautomation)87,000 unitsNet present valuePerUnit$92$ 1925953$39Total$??$ 1,100,000?Proposed(automation)133,000 unitsPerUnit$92$19?~/~9$44Total$??$ 2,330,000?5. Recalculate the NPV using a 8 percent discount rate. (Future Value of $1, Present Value of $1. Future Value Annuity of $1, PresentValue Annuity of $1.) (Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign.Enter the answer in whole dollars.)

The net present value measures the current value of an investment's projected cash flows against the…

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.) (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

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.) (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

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 5MAD: Home Garden Inc. is considering the construction of a distribution warehouse in West Virginia to...

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