Determine cash flows Kaual Tools Inc. is planning to invest in new manufacturing equipment to make...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Determine cash flows Kaual Tools Inc. is planning to invest in new manufacturing equipment to make a new garden tool. The new garden tool is expected to generate additional annual sales of 6,500 units at $52 each. The new manufacturing equipment will cost $140,800 and is expected to have a 10-year life and a $10,800 residual value. Selling expenses related to the new product are expected to be 4% of sales revenue. The cost to manufacture the product includes the following on a per-unit basis: Direct labor Direct materials Fixed factory overhead-depreciation Variable factory overhead Total $8.80 28.90 2.00 4.50 $44.20 Determine the net cash flows for the first year of the project, Years 2-9, and for the last year of the project. Use the minus sign to indicate cash outflows. Do not round your intermediate calculations but, if required, round your final answers to the nearest dollar. Kauai Tools Inc. Net Cash Flows Line Item Description Initial investment Operating cash flows: Annual revenues Selling expenses Cost to manufacture Year 1 Years 2-9 Last Year Cost to manufacture Net operating cash flows Total for Year 1 Total for Years 2-9 (operating cash flow) Residual value Total for last year Determine cash flows Kaual Tools Inc. is planning to invest in new manufacturing equipment to make a new garden tool. The new garden tool is expected to generate additional annual sales of 6,500 units at $52 each. The new manufacturing equipment will cost $140,800 and is expected to have a 10-year life and a $10,800 residual value. Selling expenses related to the new product are expected to be 4% of sales revenue. The cost to manufacture the product includes the following on a per-unit basis: Direct labor Direct materials Fixed factory overhead-depreciation Variable factory overhead Total $8.80 28.90 2.00 4.50 $44.20 Determine the net cash flows for the first year of the project, Years 2-9, and for the last year of the project. Use the minus sign to indicate cash outflows. Do not round your intermediate calculations but, if required, round your final answers to the nearest dollar. Kauai Tools Inc. Net Cash Flows Line Item Description Initial investment Operating cash flows: Annual revenues Selling expenses Cost to manufacture Year 1 Years 2-9 Last Year Cost to manufacture Net operating cash flows Total for Year 1 Total for Years 2-9 (operating cash flow) Residual value Total for last year
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
Company D is a merchandiser of MLB Hats. One of their biggest customers calls Company D and expresses concerns over their ability to pay the $20,000 owed to Company D. Company D agrees to covert the...
-
Data pertaining to the current position of Spruce Pine Medical Company are as follows: Cash ............. $384,000 Marketable securities ....... 176,000 Accounts and notes receivable (net) . 608,000...
-
Use the definition of a liability to explain why taxes payable is a liability.
-
Think of a time when you have been very satisfied with a job you have held. What made that job satisfying? Also think of a time when you have been dissatisfied with a job you have held. What made...
-
These items are taken from the financial statements of Xenox Corporation for 2012. Retained earnings (beginning of year) ... $31,000 Utilities expense .............. 2,000 Equipment ..................
-
K Fitchminster Injection Molding, Inc.: Rose Climbs High Rose Flamant, the plant manager of Fitchminster Injection Molding, Inc. (FIM), is pondering an interesting offer made by the president and...
-
1. Describe a real-world brands/retailers. Use examples from brands/retailers that used the KL recently (in the past 2 years). Hint:- Key learning [KL] are choose any one (Consumerism , Omnichannel,...
-
Explain the role of safety and security in logistics management.
-
Select 2 points that the author makes that may agree or disagree with and explain why to relate points to contemporary perspectives in health care qualitative oversight in reference to Thirteen Ways...
-
What is supply chain visibility? What is cross-docking in logistics management?
-
What may be some pros and cons of a confrontation meeting with employees to announce change initiatives? What outcomes would you expect? Add a new discussion topic
-
3) Consider a 3-stage air axial compressor. It has stage pressure ratios and total-to-total efficiencies as follows: 1st stage: PR=1.6, nt=0.87, 2nd stage: PR=1.4, Ntt=0.89, 3rd stage: PR=1.3,...
-
In 2022. Ms. Alice Becker owns four single family residential rental properties. Relevant informa- tion on these properties is as follows: CCA class Capital cost of building January 1, 2022, UCC 26...
-
Why is a help desk and production support critical to system implementations? Discuss its interrelationship with the problem management and reporting system.
-
The 2015 annual report of the Procter & Gamble Company (P&G) is available at www.pginvestor.com. After reviewing P&Gs annual report, respond to the following questions: a. When does P&G recognize...
-
Consider a publicly held company whose products you are familiar with. Some examples might include: Access the companys public website and search for its most recent annual report. (Some companies...
-
The 2014 financial statements of LVMH Moet Hennessey-Louis Vuitton S.A.LVMH is a Paris-based holding company and one of the worlds largest and best-known luxury goods companies. As a member-nation of...
Study smarter with the SolutionInn App