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Matheson Electronics has just developed a new electronic device that it believes will have broad market appeal. The compamy has performed marketing and cost studies

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Matheson Electronics has just developed a new electronic device that it believes will have broad market appeal. The compamy has performed marketing and cost studies thit revesled the foltowing information: a. New equipment would have to be acquired to produce the device. The equipment would cost $198,000 and have a sib-yeat useful tife. After slx yeurs, it would hove a salvage value of about $24,000. b. Sales in units ovgr the next six years are projected to be as follows? c. Production and sales of the device would require working capital of $52,000 to finance accounts receivabie, inverntorles, and dayto-day cash needs. This working capital would be released at the end of the project's iffe. d. The devices would sell for $50 each; variable costs for production, administration, and sales would be $35 per unh. e. Fixcd costs for salarles, maintenance, property taxes, Insurance, and straight-fine depreciatipn on the equipment would total $140,000 per year. (Depreciation is based on cost less salvage value.) 1. To gain rapid entry into the market, the company would have to advertise heavily. The advertising costs would be: g. The company's required rate of return is 12%. Click here to view Exhibit 781 and Exhibit 78-2. to determine the appropriate discount factor(s) using tables. Required: Matheson Electronics has just developed a new electronic device that it believes will have broad market appeal. The compamy has performed marketing and cost studies thit revesled the foltowing information: a. New equipment would have to be acquired to produce the device. The equipment would cost $198,000 and have a sib-yeat useful tife. After slx yeurs, it would hove a salvage value of about $24,000. b. Sales in units ovgr the next six years are projected to be as follows? c. Production and sales of the device would require working capital of $52,000 to finance accounts receivabie, inverntorles, and dayto-day cash needs. This working capital would be released at the end of the project's iffe. d. The devices would sell for $50 each; variable costs for production, administration, and sales would be $35 per unh. e. Fixcd costs for salarles, maintenance, property taxes, Insurance, and straight-fine depreciatipn on the equipment would total $140,000 per year. (Depreciation is based on cost less salvage value.) 1. To gain rapid entry into the market, the company would have to advertise heavily. The advertising costs would be: g. The company's required rate of return is 12%. Click here to view Exhibit 781 and Exhibit 78-2. to determine the appropriate discount factor(s) using tables. Required

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