e QuestinnZ-CH 14-PROBLEr x a}; Assignments: FaZiANTHZOLS x | G Whatistheseasonalpatterno x | 5 Course Hero x | G howdouscreenshotona mac x | + v (- 9 C' i ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation,com%252F#/activity/question-group/kEZASsBkEPsTNiOJchee... r1] 3'} I o 5 CH 14- PROBLEMS 0 Saver: Help Save&Exit Submit w 2 a. New equipment would have to be acquired to produce the device. The equipment would cost $480,000 and have a six-year useful life. After six years, it would have a salvage value of about $12,000. b. Sales in units over the next six years are projected to be as follows: 25 points Year Sales in Units 1 15,000 Sklppe'j 2 20 , 000 3 22, 000 46 24, 000 ; eBook c. Production and sales ofthe device would require working capital of $61,000 to nance accounts receivable, inventories, and day- to-day cash needs, This working capital would be released at the end of the project's life. d. The devices would sell for $60 each; variable costs for production, administration, and sales would be $45 per unit. e. Fixed costs for salaries, maintenance, property taxes, insurance, and straightline depreciation on the equipment would total $155,000 per year. (Depreciation is based on cost less salvage value.) f. To gain rapid entry into the market. the company would have to advertise heavily. The advertising costs would be: References Amount: of Yearly Yea: Advertising 12 5 218,000 3 5 70,000 46 5 60,000 g. The company's required rate of return is 15%. Click here to view Exhibit 1454 and Exhibit 148-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net cash inflow (incremental contribution margin minus incremental xed expenses) anticipated from sale ofthe device for each year over the next six years. 2-a. Using the data computed in (1) above and other data provided In the problem. determine the net present value ofthe proposed investment. 2-D. Would you recommend that Matheson accept the device as a new product? Complete this question by entering your answers In the uh: below. J Req 1 Req 2A Req 23 a ( Janey 20f2 Next