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Please help with the breakdown of calculations Your company has just developed a new electronic device that you believe will have broad market appeal. Your

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Please help with the breakdown of calculations

Your company has just developed a new electronic device that you believe will have broad market appeal. Your cost and marketing studies have revealed the following information: a. New equipment would have to be purchased to produce the device. The equipment would cost $315,000 and would have a useful life of 6 years, at the end of which, it will have a salvage value of $15,000. b. Sales in units are projected to be the following over the next 6 years: Year 1-9,000 units Year 2-15,000 units Year 3-18,000 units Years 4-5-6-22,000 units in each year c. Production and sales of the device will require about $60,000 of working capital to finance the additional accounts receivable, inventories, and day-to-day cash needs. The working capital will be recovered at the end of the product's life in the sixth year. d. The devices will sell for $35 each, and variable costs for production, and SGA will be $15 per unit. e. Fixed costs for salaries, maintenance, property taxes, insurance, and straight-line depreciation are estimated to be $135,000 per year. Depreciation is based on cost less salvage value over the useful life of the equipment. f. To gain rapid entry into the market, the company will have to spend heavily on advertising at the following amounts: year Year 1-$180,000 Year 2-$180,000 Year 3-$150,000 Years 4-5-6-$120,000 for each year g. The company's required rate of return is 14%. Your company has just developed a new electronic device that you believe will have broad market appeal. Your cost and marketing studies have revealed the following information: a. New equipment would have to be purchased to produce the device. The equipment would cost $315,000 and would have a useful life of 6 years, at the end of which, it will have a salvage value of $15,000. b. Sales in units are projected to be the following over the next 6 years: Year 1-9,000 units Year 2-15,000 units Year 3-18,000 units Years 4-5-6-22,000 units in each year c. Production and sales of the device will require about $60,000 of working capital to finance the additional accounts receivable, inventories, and day-to-day cash needs. The working capital will be recovered at the end of the product's life in the sixth year. d. The devices will sell for $35 each, and variable costs for production, and SGA will be $15 per unit. e. Fixed costs for salaries, maintenance, property taxes, insurance, and straight-line depreciation are estimated to be $135,000 per year. Depreciation is based on cost less salvage value over the useful life of the equipment. f. To gain rapid entry into the market, the company will have to spend heavily on advertising at the following amounts: year Year 1-$180,000 Year 2-$180,000 Year 3-$150,000 Years 4-5-6-$120,000 for each year g. The company's required rate of return is 14%

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