Proposal Analysis As the newly hired analyst for the corporate offices of Illuminated Electronics Corporation (IEC), you must prepare an analysis of a capital budgeting proposal. Proposal 1 - PPD DEC has just developed a new electronic device (called the PPD) and it believes it 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 $315,000 and have a six-year useful life. After six years, it would have a salvage value of about $15,000. B) Sales in units over the next six years are projected to be as follows: Year Sales in Units 9,000 15,000 WN 18,000 4 6 22,000 C) Production and sales of the device would require working capital of $60,000 to finance accounts receivable, inventories, and day-to-day cash needs. This working capital would be released at the end of the project's life. D) The devices would sell for $35 each; variable costs for production, administration, and sales would be $15 per unit. E) Fixed costs for salaries, maintenance, property taxes, insurance, and straight-line depreciation on the equipment would total $135,000 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: Year Amount of Yearly Advertising 1-2 $180,000 3 $150,000 4 6 $120,000 G) The company's required rate of return in 14%.Proposal 2 - NED One of your colleagues has provided an analysis of a competing proposal and concluded the following: NPV = $120,000; IRR = 15.5%; Payback Period = 3.5 years, Profitability Index = 1.25 Required: 1) Compute the net cash inflow (incremental contribution margin minus incremental fixed expenses) anticipated from the sale of the PPDs for each year over the next six years