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 $$216,000$ and have a six$-$year useful life. After six years, it would have a salvage value of about $$12,000.$

b$.$ Sales in units over the next six years are projected to be as follows:

$\backslash$table$[[$Year$,$Sales in Units$],[1,10,000],[2,15,000],[3,17,000],[4-6,19,000]]$

c$.$ Production and sales of the device would require working capital of $$53,000$ to finance accounts receivable, inventories, and dayto$-$day cash needs. This working capital would be released at the end of the project's life.

d$.$ The devices would sell for $$55$ each; varlable costs for production, administration, and sales would be $$40$ per unit.

e$.$ Fixed costs for salaries, maintenance, property taxes, insurance, and straight$-$line depreciation on the equipment would total $$120,000$ 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 costs would be:

$\backslash$table$[[,\backslash$table$[[$Amount of$],[$Yearly$]]],[1-2,\backslash$table$[[$Advertising$],[$$$68\mathrm{.}000$