Chapter $12$ Homework

Determine cash flows

Kauai Tools 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 $5,500$ units at $$46$ each. The new manufacturing equipment will cost $$107,200$ and is expected to have a $10-$year life and a $$8,200$ 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:

$\backslash$table$[[$Direct labor,$$7\mathrm{.}80$