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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
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 units at $ each. The new manufacturing equipment will cost $ and is expected to have a year life and a $ residual value. Selling expenses related to the new product are expected to be of sales revenue. The cost to manufacture the product includes the following on a perunit basis:
Line Item Description Cost
Direct labor $
Direct materials
Fixed factory overheaddepreciation
Variable factory overhead
Total $
Determine the net cash flows for the first year of the project, Years 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 answers to the nearest dollar.
Kauai Tools Inc.
Net Cash Flows
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Line Item Description Year Years Last Year
Initial investment $
Initial investment
Operating cash flows:
Annual revenues $
Annual revenues
$
Annual revenues
$
Annual revenues
Selling expenses
Selling expenses
Selling expenses
Selling expenses
Cost to manufacture
Cost to manufacture
Cost to manufacture
Cost to manufacture
Net operating cash flows $
Net operating cash flows
$
Net operating cash flows
$
Net operating cash flows
Total for Year $
Total for Year
Total for Years operating cash flow $
Total for Years operating cash flow
Residual value
Residual value
Total for last year $
Total for last year
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