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 $474,000 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 18,000 23,000 25,000 27,000 4-6 c. Production and sales of the device would require working capital of $62,000 to finance accounts d. The devices would sell for $30 each, variable costs for production, administration, and sales would be 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 receivable, inventories, and day-to-day cash needs. This working capital would be released at the end of the project's life $15 per unit. equipment would total $144,000 per year. (Depreciation is based on cost less salvage value.) program would be Amount of Yearly Advertising S 91,000 $ 71,000 S 61,000 Year 1-2 4-6