HW 13 6 Saved Help Save & Exit Submit 8 Check my work Matheson Electronics has just developed a new electronic device that it believes will have broad market appeal. The company has performed marketing and cost studies that revealed the following information: a. New equipment would have to be acquired to produce the device. The equipment would cost $228,000 points and have a six-year useful life. After six years, it would have a salvage value of about $24,000. b. Sales in units over the next six years are projected to be as follows: eBook Year Sales in Units 14,000 19,000 21,000 23,000 Print References c. Production and sales of the device would require working capital of $55,000 to finance accounts d. The devices would sell for $30 each; variable costs for production, administration, and sales would be $15 e. Fixed costs for salaries, maintenance, property taxes, insurance, and straight-line depreciation on the f. To gain rapid entry into the market, the company would have to advertise heavily. The advertising costs receivable, inventories, and day-to-day cash needs. This working capital would be released at the end of the project's life. per unit. equipment would total $179,000 per year. (Depreciation is based on cost less salvage value.) would be: Amount of Yearly Advertising $78,000 64,000 $54,000 Year 1-2 4-6 g. The company's required rate of return is 15%. Click here to view Exhibit 13B-1 and Exhibit 138-2, to determine the appropriate discount factorts) using tables. Check my work g. The company's required rate of return is 15%. points Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net cash inflow (incremental contribution margin minus incremental fixed expenses) anticipated from sale of the device for each year over the next six years. 2-a. Using the data computed in () above and other data provided in the problem, determine the net present value of the proposed investment 2-b. Would you recommend that Matheson accept the device as a new product? eBook Print Complete this question by entering your answers in the tabs below References Req 1 Req 2A Req 2B Compute the net cash inflow (incremental contribution margin minus incremental fixed expenses) anticipated from sale of the device for each year over the next six years. (Negative amounts should be indicated by a minus sign.) Year 1 Year 3 Year 4-6 oar 2 Incremental contribution margi Incrememental fixed expenses Net cash inflow (outflow) Req 2A ) Check my work Yeardvertising 78,000 $64,000 $54,000 1-2 4-6 8 points g. The company's required rate of return is 15%. Click here to view Exhibit 138-1 and Exhibit 13B-2, to determine the appropriate discount factoris) using tables. 1.Compute the net cash inflow (incremental contribution margin minus incremental fixed expenses) anticipated from sale of the 2-b. Would you recommend that Matheson accept the device as a new product? eBook Required 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 of the proposed investment Print References Complete this question by entering your answers in the tabs below. Req 2B Req 1 Req 2A Using the data computed in (1) above and other data provided in the problem, determine the net present value of the proposed investment. (Negative amounts should be indicated by a minus sign. Round your final answer to the nearest whole dollar amount.) Req 2B ) C Req 1
