Clarion Company is considering an opportunity to produce and sell a revolutionary new smoke detector for homes . To determine whether this would be a profitable venture , the company has gathered the following data on probable costs and market potential : aNew equipment would have to be acquired to produce the smoke detector . The equipment would cost $170,000 and be usable for 10 years . After 10 years , it would have a salvage value equal to 10% of the original cost . b. Production and sales of the smoke detector would require a working capital investment of $47,000 to finance accounts receivable , inventories , and day-to -day cash needs . This working capital would be released for use elsewhere after 10 years . An extensive marketing study projects sales in units over the next 10 years as follows :