Eisner Company has an opportunity to manufacture and sell a new product for a five-year period. The company estimated the following costs and revenues for the new product:

Cost of new equipment $ 420,000 Initial working capital required $ 78,000 Overhaul of the equipment after three years $ 50,000 Salvage value of the equipment after five years $ 30,000 Annual revenues and costs:

Sales $ 850,000 Variable expenses $ 500,000 Fixed out-of-pocket operating costs $ 194,000

When the project concludes in five years the working capital will be released for investment elsewhere in the company.

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Font Alignment X V fx Number TS Styles Cells Editing Ideas A B C D E F G Blue cells can be modified Int rate 0.0% Now 1 ase of equipment 2 3 4 5 (420,000) stment in working capital S (78,000) rhaul of equipment $ (50,000) age value of the equipment 30,000 rking capital released 78,000 es $ 850,000 $ 850,000 $ 850,000 $ 850,000 un 850,000 riable expenses $ (500,000) $ (500,000) $ (500,000) $ (500,000) $ (500,000) ed out-of-pocket operating costs $ (200,000) $ (200,000) $ (200,000) $ (200,000) $ (200,000) tal cash flows (a) $ (498,000) $ 150,000 $ 150,000 $ 100,000 $ 150,000 $ 258,000 scount factor (b) 1.000 1.000 1.000 1.000 1.000 1.000 esent value of cash flows (a) x (b) (498,000) $ 150,000 $ 150,000 $ 100,000 $ 150,000 $ 258,000 let present value (SUM B16:G16) 310,000 Goal Seek Template + W 10/