Daffodil Inc. is planning to invest in manufacturing equipment to make a new garden tool. The new garden tool is expected to generate additional annual sales of $8,600$ units at $$44\mathrm{.}00$ each. The new manufacturing equipment will cost $$158,300,$ have a $10-$year life, a residual value of $$12,100,$ and will be depreciated using the straight$-$line method. 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:

Line Item Description Amount

Direct labor $$7\mathrm{.}50$

Direct materials $24\mathrm{.}40$

Fixed factory overhead$$depreciation $1\mathrm{.}70$

Variable factory overhead $3\mathrm{.}80$

Total $$37\mathrm{.}40$

a$.$ 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.

Line Item Description Year $1$ Years $2-9$ Last Year

Operating cash flows:

Annual revenues $fill in the blank $1$

$fill in the blank $2$

$fill in the blank $3$

Selling expenses fill in the blank $4$

fill in the blank $5$

fill in the blank $6$

Cost to manufacture fill in the blank $7$

fill in the blank $8$

fill in the blank $9$

Net operating cash flows $fill in the blank $10$

$fill in the blank $11$

$fill in the blank $12$

Initial investment fill in the blank $13$

Total for year $1$ $fill in the blank $14$

Total for years $2-9$ $fill in the blank $15$

Residual value fill in the blank $16$

Total for last year $fill in the blank $17$

b$.$ Assume that the operating cash flows occur evenly throughout the year. Determine how many months in the future, from the date of the initial investment, it will be when the cash for the initial investment will be paid back. Round up to the nearest number of months.

fill in the blank $1$ of $1$

months