Determine Cash Flows Marigold Inc. is planning to invest in new manufacturing equipment to make a new garden tool. The garden tool is expected to generate additional annual sales of 7,000 units at $46 each. The new manufacturing equipment will cost $136,500 and is expected to have a 10-year life and $10,500 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 $7.80 Direct materials 25.60 Fixed factory overhead-depreciation 1.80 Variable factory overhead 3.90 Total $39.10 Determine the net cash flows for the first year of the project, Years 2-9, and for the last year of the project. Use a minus sign to indicate cash outflows. Do not round your intermediate calculations but, if required, round your final answer to the nearest dollar. Marigold Inc. Net Cash Flows Initial investment Year 1 Years 2-9 Last Year -136,500 Operating cash flows: Annual revenues Selling expenses Cost to manufacture Net operating cash flows Total for Year 1 Total for Years 2-9 Residual value Total for last year 30 x Check My Work 2375,000 Average Rate of Return The following data are accumulated by Lone Peak Inc. in evaluating two competing capital investment proposals: 3D Printer Truck Amount of investment $36,000 $76,000 Useful life Estimated residual value 4 years 9 years 0 0 Estimated total income over the useful life $5,040 $39,330 Determine the expected average rate of return for each proposal. If required, round your answers to one decimal place. 3D Printer 0.5 X % Truck % Feedback Check My Work Divide the estimated average annual income by the average investment. Investment cost plus residual value, divided by two, equals average investment.