Kauai Tools 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 $7,100$ units at $$52$ each. The new manufacturing equipment will cost $$153,800$ and is expected to have a $10-$year life and a $$11,800$ 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:

Line Item Description Cost

Direct labor $$8\mathrm{.}80$

Direct materials $28\mathrm{.}90$

Fixed factory overhead$$depreciation $2\mathrm{.}00$

Variable factory overhead $4\mathrm{.}50$

Total $$44\mathrm{.}20$

Determine the net cash flows for the first year of the project, Years $29,$ 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.

Kauai Tools Inc.

Net Cash Flows

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Line Item Description Year $1$ Years $2-9$ Last Year

Initial investment $Initial investment

Operating cash flows:

Annual revenues $Annual revenues

$Annual revenues

$Annual revenues

Selling expenses Selling expenses

Selling expenses

Selling expenses

Cost to manufacture Cost to manufacture

Cost to manufacture

Cost to manufacture

Net operating cash flows $Net operating cash flows

$Net operating cash flows

$Net operating cash flows

Total for Year $1$ $Total for Year $1$

Total for Years $29($operating cash flow$)$ $Total for Years $29($operating cash flow$)$

Residual value Residual value

Total for last year $Total for last year