Calculate Cash Flows

Out of Eden, Inc., is planning to invest in new manufacturing equipment to make a new garden tool. The new garden tool is expected to generate additional annual sales of 9,800 units at $30.00 each. The new manufacturing equipment will cost $116,700 and is expected to have a 10-year life and $8,900 residual value. Selling expenses related to the new product are expected to be 5% of sales revenue. The cost to manufacture the product includes the following on a per-unit basis:

Direct labor		$5.10
Direct materials		16.70
Fixed factory overhead-depreciation		1.10
Variable factory overhead		2.60
	Total	$25.50

Determine the net cash flows for the first year of the project, Years 29, and for the last year of the project. Use the minus sign to indicate cash outflows. Do not round your intermediate calculations but, if required, round your final answer to the nearest dollar.

Initial investment Operating cash flows Annual revenues Se ng expenses Cost to manufacture Net operating cash flows Total for Year 1 Total for Years 2-9 Residual value Total for last year out of Eden, Inc. Net Cash Flows Years 2-9 Last Year Year 1 116700 o 2352000 294000 14700 117600 1999200 249900 s 29400 s 235200 29400 235200 294000 14700 249900 29400 8900 38300