Winnebagel Corporation currently sells 29,000 motor homes per year at $78,000 each and 8,000 luxury motor coaches per year at $120,000 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 24,000 of these campers per year at $24,000 each. An independent consultant has determined that if the company introduces the new campers, it could boost the sales of its existing motor homes by 3,600 units per year and reduce the sales of its motor coaches by 950 units per year.

What are the annual sales for the new portable camper?

Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g. 1,234,567.

What are the annual increased sales for the motor home line?

Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g. 1,234,567.

What is annual loss in sales for the motor coach?

Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g. 1,234,567.

2. Consider an asset that costs $665,000 and is depreciated straight-line to zero over its 8-year tax life. The asset is to be used in a 5-year project; at the end of the project, the asset can be sold for $141,000.

What is the book value of the equipment at the end of the 5 years?

Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.

If the relevant tax rate is 21 percent, what is the aftertax cash flow from the sale of this asset?

Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.

3. Dog Up! Franks is looking at a new sausage system with an installed cost of $710,000. This cost will be depreciated straight-line to zero over the projects 6-year life, at the end of which the sausage system can be scrapped for $96,000. The sausage system will save the firm $205,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $57,000.

What is the aftertax salvage value of the equipment?

Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.

What is the annual operating cash flow?

Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.

If the tax rate is 21 percent and the discount rate is 11 percent, what is the NPV of this project?

Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.