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 $246,000 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:

Year	Sales in Units
1	14,000
2	19,000
3	21,000
46	23,000

c. Production and sales of the device would require working capital of $57,000 to finance accounts receivable, inventories, and day-to-day cash needs. This working capital would be released at the end of the projects life.

d. The devices would sell for $40 each; variable costs for production, administration, and sales would be $25 per unit.

e. Fixed costs for salaries, maintenance, property taxes, insurance, and straight-line depreciation on the equipment would total $132,000 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 program would be:

Year	Amount of Yearly Advertising
12	$	86,000
3	$	66,000
46	$	56,000

g. The companys required rate of return is 15%.

Click here to view Exhibit 8B-1 and Exhibit 8B-2, to determine the appropriate discount factor(s) using tables.

1. Compute the net cash inflow (cash receipts less yearly cash operating expenses) anticipated from sale of the device for each year over the next six years.

	Year 1	Year 2	Year 3	Year 4-6
Sales in units	14,000	19,000	21,000	23,000
Sales in dollars	$560,000	$760,000	$840,000	$920,000
Variable expenses	350,000	475,000	525,000	575,000
Contribution margin	210,000	285,000	315,000	345,000
Fixed expenses:
Salaries and other	95,000	95,000	95,000	95,000
Advertising	86,000	86,000	66,000	56,000
Total fixed expenses	181,000	181,000	161,000	151,000
Net cash inflow (outflow)	$29,000	$104,000	$154,000	$194,000

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. (Any cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places.)

	Now	1	2	3	4	5	6
Cost of equipment	$(246,000)	$0	0	$0	$0	$0	$0
Working capital	(57,000)	0	0	0	0	0	0
Yearly net cash flows	0	$29,000	$104,000	$154,000	$194,000	$194,000	$194,000
Release of working capital	0	0	0	0	0	0	57,000
Salvage value of equipment	0	0	0	0	0	0	24,000
Total cash flows	$(303,000)	$29,000	$104,000	$154,000	$194,000	$194,000	$275,000
Discount factor (15%)
Present value
Net present value	$0

Please help with Discount factors and Present values.