Question: Matheson Electronics developed a new electronic device it believes will have broad market appeal. The company gathered the following estimates: a . The equipment needed
Matheson Electronics developed a new electronic device it believes will have broad market appeal. The company gathered the following estimates:
a The equipment needed to make the device would cost $ and have a sixyear useful life with a salvage value of $
b Sales in units over the next six years are projected to be as follows:
tableYearSales in Units
c Production and sales of the device would require working capital of $ to be released at the end of the project's life.
d The device would sell for $ each with a variable cost of $ per unit.
e Fixed costs for salaries, maintenance, property taxes, insurance, and straightline depreciation on the equipment would total $ per year. Depreciation is based on cost less salvage value.
f To gain rapid entry into the market, the company would invest heavily in advertising as follows:
tabletableAmount of Yearly,YearAdvertising$
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