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How do I solve these that I missed? Determine Cash Flows Natural Foods Inc. is planning to invest in new manufacturing equipment to make a
How do I solve these that I missed?
Determine Cash Flows Natural Foods 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 6,600 units at $40 each. The new manufacturing equipment will cost $107,200 and is expected to have a 10-year life and a $8,200 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 $6.80 Direct materials 22.30 Fixed factory overhead-depreciation 1.50 3.40 Variable factory overhead Total $34.00 Determine the net cash flows for the first year of the project, Years 2-9, 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. Natural Foods Inc. Net Cash Flows Years 2-9 Last Year Year 1 107,200 Initial investment $ X Operating cash flows: Annual revenues $ 264,000 13,200 $264,000 13,200 $264,000 13,200 Selling expenses x X x Cost to manufacture 22,440 X 22,440 X 22,440 X Natural Foods Inc. Net Cash Flows Years 2-9 Last Year Year 1 $ 107,200 Initial investment x Operating cash flows: Annual revenues Selling expenses $ 264,000 13,200 22,440 x x $ 264,000 13,200 22,440 x x $ 264,000 13,200 22,440 x x Cost to manufacture Net operating cash flows $ 196,680 X $ 196,680 X $ 196,680 x $ Total for Year 1 89,480 x Total for Years 2-9 (operating cash flow) Residual value Total for last yearStep by Step Solution
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