Matheson Electronics has just developed a new electronic device that it believes will have broad market appeal. The company has performed marketing and cost studies that revealed the following information: a. New equipment would have to be acquired to produce the device. The equipment would cost $120,000 and have a six-year useful life. After six years, it would have a salvage value of about $18,000. b. Sales in units over the next six years are projected to be as follows: Year 1 2 3 4-6 Sales in Units 6,000 11,000 13,000 15,000 C. Production and sales of the device would require working capital of $44,000 to finance accounts receivable, inventories, and day-to-day cash needs. This working capital would be released at the end of the project's life. d. The devices would sell for $45 each; variable costs for production, administration, and sales would be $25 per unit. e. Fixed costs for salaries, maintenance, property taxes, insurance, and straight-line depreciation on the equipment would total $132,000 per year. (Depreciation is based on cost less salvage value.) f. To gain rapid entry into the market, the company would have to advertise heavily. The advertising costs would be: Year 1-2 3 4-6 Amount of Yearly Advertising $74,000 $53,000 $43,000 g. The company's required rate of return is 15%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net cash inflow (incremental contribution margin minus incremental fixed expenses) anticipated from sale of the device for each year over the next six years. 2-a. Using the data computed in (1) above and other data provided in the problem, determine the net present value of the proposed investment 2-b. Would you recommend that Matheson accept the device as a new product? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Compute the net cash inflow (incremental contribution margin minus incremental fixed expenses) anticipated from sale of device for each year over the next six years. (Negative amounts should be indicated by a minus sign.) Year 1 Year 2 Year 3 Year 4-6 Incremental contribution margin $ 120,000 $ 220,000 $ 260,000 $ 300,000 Incrememental fixed expenses $ 189,000 $ 189,000 $ 168,000 $ 158,000 Net cash inflow (outflow) $ (69,000) $ 31,000 $ 92,000 $ 142,000 Reg 1 Reg 2A Reg 2B Using the data computed in (1) above and other data provided in the problem, determine the net present value of the proposed investment. (Negative amounts should be indicated by a minus sign. Round your final answer to the nearest whe dollar amount.) Net present value 95,380 Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Req 2B Would you recommend that Matheson accept the device as a new product? Yes ONO EXHIBIT 140-1 Pistant Value of St in Periods 10- 2 3 9 2 5 20- - 23 26 062 09/19 0935 0926 0909 099 29 08722220 0 0 0 0.240 0630326 0820 0 085 100 0926 0907,680 0 0857082 076 0872 09:076069 0/6 0432 0.06 0 0 00:06 0660 0640 099 02-0240 0 079402 05] 0 0.21 0 067505858 0.4 062 600 0905 054 0551 05a526 0 085 82092 0 075 0709 0 0 66 06 092072 052 0534 050499 44820467 01 040423 adio 022007 al 650 02 30. 6497 4476,047 0490020 0370,0355.02 032 0790 0746706 6E 060 6596 0564 65.5 0607 140 04E040 0399030 0352015 039 0.00 0 0262 0.60 07 066060505705E080457 0425 1400 0 0 0 0.290 0 02 09 0335 1222 2216 007 0627 02 0540 0502 27 04340401 037603510327 0.05 0280266 0.29 03 02% 0204 01 0.179 01 005 0 0592 054 0 040 0424 0391 0 09:03 094 0263 24 023 0209 094 0 067 01401 06 064 6559 1506 04-02 1366 0352 02:1295 020 2247 0227 020 ,oo 0 0.116 0650 06 6270475 0429 0 0 0 0 0287 02 13302900 0 01 026 0723 010009 006 06 05% 0 0444 09:0356 0 02023 0231 020,0 0,4152 637 012 02 002 0092 000.00 0000 001 05.00 0 0 04 038 0.720 0290 028 0229 0204 0 0 0.5 090 010 004 000 0 00000001 006 0.47 4505042 0 0340 029 426 0 0 0 04600 07 009 00008 006 0062 0065 0049 004 05 007 052 03-02 029 0209,000 1140 01230mm,000 0 004 0 007 0051 0.05.0.00 005 0534 1468,0009 0292 022 0 0 06:01 0123 0 0 0 007 002 006 007 0 006 002 0 0.57 04-01 0219.20 421 019 01 hous go 00000 009 0060 0000005 009 000030 0028 002 04 0 050 0 0250 0 0 0000 02 006 002009 004 001 001 0.00 002 000024 002100 04704027 022 004 016-08 01 009 0000000AO009,00) 003 003 0027 00230020,007 0014 045 03 03/02 020174 04 02400M 10 007 0 0.04 0043 0000,00000 2009 0.06 0014 0012 04010 0 0 0220990M4 01 0.112 00000 004 0000 007 007 0.02 00:00 006 0% 0.01 0000 0422 012 12024 004 0.60 01/23 10 0000000,0000002 0020 0022 00 006 001100m 00W 0007 006 07 202 02 0 0 1730 0001 007 000 000090 0 007 002 00 10500400 009 0000000 010 0310 (247 419 70150726 010:00 0066 0.00 004 00002009 0.00 006 40,000000 0006 0.375 0295.023 0 0.15076 002 0070.00 0047 000.00 0.024 0020 0.00 00000 600 0007 006 0.005 0.004 0 0 0 0 07015 010 004 006 0055 0042 0 006 0000014 10 0000 0007 0000 0005 000 000 0347020207 06 00000006 10-0 0047 0000,0000,0000 00000000006 000 104 000 0002 0 0 0 10:316000 009 008 00000026 0020 0000 0.00 000 0005 000 0000 0 0 000 020420125 11 010 008 006 00000029 0022 0.07 0 00000 0006 0.0000 4000002 0002 0002 12009 07 m 0.99 006 000.04.06 0020 0020.005 0012 000,000 0.005 0.00 0.00 400,0002 0002 006 020 0 0007 0067 0046 002 0022 005,0000 4006 000 400000 0.00 006 0000 000 000 000 0000 24 25 4 EXHIBIT 148-2 Present Value of an Annulty of $1 in Arrears : Periods 0 - 6 -= - 0 -- 052 0952 09:093096 09 0909 09010 0650 0 06:085 08 00 0 0EZE 20 0 - 00000 | 16 164 150 TE -- 15 1890 RESE 1626 1665 1585 1566 1647 158 150 492 17 10 25 22 22 25 2442022261222 22 2246 220 27 2006 2009 20220 11952 360 36 365 32 24 31 302307 297 29 28 296 27 22639 -2.69 750 49 2.42474 767 : 0 0 265 13 1952 3773 3062,29262 28 27 BBS 5.2325i 76 67 435 3 3 338 3393 33 32 37 30923020 251 500g 5906 5.0 : 477 2860 4 039 322 12:36 36 3 345 327 3242 369 6 62 6 2016 5.5 53 ,69 ) 2007 08:39 37 36-335142 1329 ce 0 6 2 3995 5.769 5575322 52 4949677 60 ) 30 4,3905 38 36733 1300 102 16 5 5650 5 26 56 50 450 apan 30 19206543929 30 3682 3 60 6 7 799 199 60 5.5 56534 5079 85 4 5 19:37 166 19, 75 : 6 55.CRO 21:57 48 794] 4.9 42 ( 12: 1995 35 46 439 ) 96790- 100 6.750 24 6759:5 54 5 990 9 14362 200 43927 05.29 74 60 6002 57 5,5229 50 80246 : 2650 352 132 0390 / BBS 06] 600 7 6 57 556 54 500g 4876 1.67% 4493 6 156 662080 947 5 ! 64 660 665 56 56 565 5162.98 4730.5%,157 19 10 , 7,976 022 73 120 69 73 7.74 75 5:22 1990 4,775 - a29 a069 30 259 900 6069 2012 139 6,840 66 56 5 6 4.ABC 12:00 192 103600 950 365 79 766 67 6850 6:29:57:50 5.3165070 16:4635442 4267 49797 2014 967459 65 667) 20 929 56 550 40 4657 6 429 4101% 16029 21 085 179 B49 075 8:02 837 52 52 da575 a476 442 4 1 163 2012 ) 20 g? 76 7645 7170 06 B9 . 04302 3976 5. 100 29580 12 779 700 692 5309 04 42 52 5674925 2009 9 247 3799 550 469 105S 2707 3.74 72 6.35 5434 5 57 5451 52 19 B02 43 143 21 6224 094 472 407 A47272 7100 63.AEL 097 3 54675% 49 a721 454 174347 13 100 2.00 0929 1290 1340 4206 46 47 04:41 6. 10 14 164 10 mg/23/574 74 ] ( 49. 44 47 52 43 4 1990 ,05 430 0 74 | 34 90232214979334) 19, 62 5 1 2 0 9.70 80 g 470 645)186 420 2510 28 4967 43 49 199 T202 6372 70 ,128 10 2727 19 1055 74% 700 66 29 5517,624979 a740 434 330 10 194 T39 50,92015 19 476, TAO 5.24.9 4760 44 43 4 176 1