TranscribedText: 9 Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare a schedule showing the estimated annual net income from the proposal to manufacture and sell the blenders. Estimated sales a $ 480,000 Q Less estimated incremental costs: Variable manufacturing costs 9 $ 200,000 6 Fixed manufacturing costs 9 48,000 Q Depreciation expense 0 110,000 6 Selling and general expenses 0 50,000 0 408,000 Income before income taxes 72,000 Income taxes expense 0 28,800 0 Net income 0 $ 43,200 Pathways Appliance Company is planning to introduce a built-in blender to its line of small home appliances. Annual sales ofthe blender are estimated at 12,000 units at a price of $35 per unit. Variable manufacturing costs are estimated at $15 per unit, incremental fixed manufacturing costs (other than depreciation) at $60,000 annually, and incremental selling and general expenses relating to the blenders at $50,000 annually. To build the blenders, the company must invest $240,000 in molds, patterns, and special equipment. Since the company expects to change the design of the blender every four years, this equipment will have a four-year service life with no salvage value. Depreciation will be computed on a straight-line basis. All revenue and expenses other than depreciation will be received or paid in cash. The company's combined state and federal tax rate is 40 percent. Required: a. Prepare a schedule showing the estimated annual net income from the proposal to manufacture and sell the blenders. b. Compute the annual net cash flows expected from the proposal. c. Compute the following. Assume discounted at an annual rate of 15 percent. Use Exhibits 26-3 and 26-4 where necessary. Required A Required B Required C Less estimated incremental costs: _ Income before income taxes Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the annual net cash flows expected from the proposal. Annual net cash ow $ 153,200 9 Required A Required B Required C Compute the annual net cash flows expected from the proposal. _:| 9 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the following. Assume discounted at an annual rate of 15 percent. Use Exhibits 26-3 and 26-4 where necessary. (Round your "PV factors" to 3 decimal places, payback period and the return on average investment answers to 1 decimal place.) (1) Payback period 2.3 8 years Return on average (2) investment 23'4 6 % (3) Net present value $ 12,916 9 Required A Required B Required C Compute the following. Assume discounted at an annual rate of 15 percent. Use Exhibits 26-3 and 26-4 where necessary. (Round your "PV factors" to 3 decimal places, payback period and the return on average investment answers to 1 decimal place.) (1) Payback period 3 years (2) Return on average % Investment (3) Net present value EXHIBIT 26-3 Present Value of $1 Payable in n Periods Present Value of $1 Due in n Periods* Number of Discount Rate Periods 1% 11/2% 5% 6% 8% 10% 12% 15% (n) 20% 990 985 952 943 926 909 893 870 833 980 971 907 890 857 826 797 756 694 A W N 971 956 864 840 794 751 712 658 579 .961 942 823 792 735 683 636 .572 482 951 928 784 747 681 621 567 497 402 .942 915 746 705 630 564 507 432 335 933 901 711 665 583 513 452 376 279 923 888 677 627 540 467 404 .327 233 9 914 875 645 592 500 424 361 284 194 10 905 862 614 .558 463 386 322 247 162 20 820 742 .377 312 215 149 104 061 026 24 788 700 310 .247 158 .102 066 035 013 36 699 585 .173 123 063 032 017 007 001EXHIBIT 26-4 Present Value of a $1 Annuity Receivable Each Period for n Periods Present Value of $1 to Be Received Periodically for n Periods Number of Discount Rate Periods 1% 11/2% 5% 6% 8% 10% 12% 15% 20% (n) 0.990 0.985 0.952 0.943 0.926 0.909 0.893 0.870 0.833 1.970 1.956 1.859 1.833 1.783 1.736 1.690 1.626 1.528 2.941 2.912 2.723 2.673 2.577 2.487 2.402 2.283 2.106 JOUAWN- 3.902 3.854 3.546 3.465 3.312 3.170 3.037 2.855 2.589 4.853 4.783 4.329 4.212 3.993 3.791 3.605 3.352 2.991 5.795 5.697 5.076 4.917 4.623 4.355 4.111 3.784 3.326 6.728 6.598 5.786 5.582 5.206 4.868 4.564 4.160 3.605 7.652 7.486 6.463 6.210 5.747 5.335 4.968 4.487 3.837 9 8.566 8.361 7.108 6.802 6.247 5.759 5.328 4.772 4.031 10 9.471 9.222 7.722 7.360 6.710 6.145 5.650 5.019 4.192 20 18.046 17.169 12.462 11.470 9.818 8.514 7.469 6.259 4.870 24 21.243 20.030 13.799 12.550 10.529 8.985 7.784 6.434 4.937 36 30.108 27.661 16.547 14.621 11.717 9.677 8.192 6.623 4.993

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Pathways Appliance Company is planning to introduce a built-in blender to its line of small home appliances. Annual sales of the blender are estimated at 12,000 units at a price of $35 per unit. Variable manufacturing costs are estimated at $15 per unit, incremental fixed manufacturing costs (other than depreciation) at $60,000 annually, and incremental selling and general expenses relating to the blenders at $50,000 annually. To build the blenders, the company must invest $240,000 in molds, patterns, and special equipment. Since the company expects to change the design of the blender every four years, this equipment will have a four-year service life with no salvage value. Depreciation will be computed on a straight-line basis. All revenue and expenses other than depreciation will be received or paid in cash. The company's combined state and federal tax rate is 40 percent. Required: a. Prepare a schedule showing the estimated annual net income from the proposal to manufacture and sell the blenders. b. Compute the annual net cash flows expected from the proposal. c. Compute the following. Assume discounted at an annual rate of 15 percent. Use Exhibits 26-3 and 26-4 where necessary. Pathways Appliance Company is planning to introduce a built-in blender to its line of small home appliances. Annual sales of the blender are estimated at 12,000 units at a price of $35 per unit. Variable manufacturing costs are estimated at $15 per unit, incremental fixed manufacturing costs (other than depreciation) at $60,000 annually, and incremental selling and general expenses relating to the blenders at $50,000 annually. To build the blenders, the company must invest $240,000 in molds, patterns, and special equipment. Since the company expects to change the design of the blender every four years, this equipment will have a four-year service life with no salvage value. Depreciation will be computed on a straight-line basis. All revenue and expenses other than depreciation will be received or paid in cash. The company's combined state and federal tax rate is 40 percent. Required: a. Prepare a schedule showing the estimated annual net income from the proposal to manufacture and sell the blenders. b. Compute the annual net cash flows expected from the proposal. c. Compute the following. Assume discounted at an annual rate of 15 percent. Use Exhibits 26-3 and 26-4 where necessary.