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This is all from the same problem. Having a lot of trouble with it. Styles Hoosier Technology Inc. is a producer of portable printers. Its

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This is all from the same problem. Having a lot of trouble with it.
Styles Hoosier Technology Inc. is a producer of portable printers. Its current line of WiFi printers are selling excellently. However, in order to cope with the foreseeable cormpetition with other similar printers, HT spent $6,200,000 to develop a new line of portable printers (new model developrment cost) that enables users to print photos from smartphones or tablets. The new portable printer model is approximately th size of a cellphone, has Bluetooth technology and is capable of printing both pictures and stickers. Users of the portable printer are able to develop an app for the device which allows them to customize photos before printing. The wireless capability also allows friends and family to print to the same printer from ll wireless smartphone and tablet devices. Furthermore the portable printer has a very appealing look has 512 MB of memory, indudes a USB cord, and no ink cartridges are required for operation. The company has also spent a further $1,000,000 to study the marketability of this new line of portable wi Fi printers (marketability study cost.) printers at a variable cost of $60 each. The total fixed costs for HT is able to produce the new portable the operation are expected to be $10,000,000 per year. HT expects to sell 3,300,000 printers, 4,500,000 printers, 3,600, the next five years. The new Wi-Fi portable printers will be selling at a price of $150 each. To launch this new line of production, HT needs to invest $35,000,000 in equipment which will be depreciated on a seven-y the end of the five year project life. HT is planning to stop producing th in two years. Should HT not introduce the new portable Wi-Fi printers, sales per year of the existing Fi printers will be 1,800,000 printers and 1,400,000 printers for the next two years respectively. The existing model can be produced at variable cost of $50 each and total fixed costs of S7,500,000 per year The existing Wi-Fi printers are selling for $115 each. If HT produces the existing models will be eroded by 1,080,000 printers for next year and 1,190 after next. In addition, to promote sales of the existing model alongside with the new portable model HT has to reduce the price of the existing model to $85 each. Net working capital for Wi-Fi printer project will be 20 percent of sales and will vary with the occurrence of cash there will be no initial NWC required. The first change in o the sales of the year. HT is currently in the tax bracket of 35 percent and it requires 20 percent returns on all its projects. The firm also requires a payback of 3 years for all projects You have just been hired by HT as a financial consultant to advise them on this new portable printer project 000 printers, 2,200,000 printers, and 1,000,000 printers of the new model per year over ear MACRS schedule. The value of the used equipment is expected to b e worth $3,800,000 a e existing Wi-Fi printers entirely Wi- new portable model, sales o ,000 printers for the year the new portable flows. As such, NWC is expected to occur in year one according t. You are expected to provide answers to the following questions to their management. t are the sunk costs for this new Wi-Fi printer project? What is sunk cost and the amount of total sunk cost? In addition, you have to advise HT on how to handle such costs

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