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 $258,000 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 ear Sales in Units 15,000 20,000 22,000 24,000 2 4-6 c. Production and sales of the device would require working capital of $58,000 to finance accounts receivable, inventories, and day-to-day cash needs. This working capital would be released at the end of d. The devices would sell for $45 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 the project's life 30 per unit. equipment would total $147,000 per year. (Depreciation is based on cost less salvage value.) program would be Amount of Yearly Advertising $ 87,000 67,000 57,000 Year 1-2 4-6