B C D E F G What will this scenario do to the product's Neutral A W N - Year 1 Year 2 Year 3 Year 4 Year 5 Capital Expenditures Equipment $340,000 Installation $10,000 Total Capital Expenditures $350,000 So $0 $0 $0 8 9 Gross Margin Impact $0 so $0 10 11 Acquisition Expenses 12 Cost of imported items 13 Cost to ship imported items 14 Replacement stock for defects $13,390 $13,390 $13,390 $13,390 $13,390 15 Cost to ship replacement items $24,720 $24,720 $24,720 $24,720 $24,720 16 Total Acquisition Expenses $38,110 $38,110 $38,110 $38,110 $38,110 17 18 New Expenses 19 Depreciation $70,000 $70,000 $70,000 $70,000 $70,000 20 Production Labor $166,400 $166,400 $166,400 $166,400 $166,400 21 Additional Warehouse Space 22 Customer Service staff $15,600 $15,600 $15,600 $15,600 $15,600 23 Total New Expenses $252,000 $252,000 $252,000 $252,000 $252,000 24 25 Pre-Tax Income Impact -$290,110 -$290,110 -$290,110 -$290,110 -$290,110 26 Cumulative Pre-Tax Income Impact -$290,110 -$580,220 -$870,330 -$1,160,440 -$1,450,550 27 28 Cash Flow Impact $570,110 -$220,110 -$220,110 -$220,110 $220,110 29 Cumulative Cash Flowimpact -$570,110 -$790,220 -$1,010,330 -$1,230,440 -$1,450,550 30