For Professor Use Only Given Data: Nms Alpha Homes is poundering an opportunity to produce and sell a new smart home monitoring system that can be managed remotely using a smart phone app. The company has gathered the folloing data: Probable costs and market potential: New equipment cost 250,000 Usable life in years Salvage value as % of cost 10% Working capital investment 100,000 Year when working capital would be released Projected sales: Year Units 5,000 7,000 10,000 4-10 12,000 Unit selling price 130 GA GA Variable costs per unit Advertising costs: Year Amount 200,000 I m 120,000 4-10 110,000 Fixed costs per year for Salaries, insurance, maintenance, depreciation EA 350,000 Minimum rate of return 10% Required: Ignore income taxes 34 1. Compute the net cash inflow (cash receipts less yearly cash operating expenses) anticipated from sale of the monitoring systems for each year over the next 10 years (15 Marks). 35 2. Determine the net present value of the proposed investement. Would you recommend Alpha Homes invest in this new product? (15 Marks)