Matheson Electronics has just developed a new electronic device that is 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 $14.000 and have a six-year useful life. After six years it would have a salvage value of about $6,000 6. Sales in units over the next sox years are projected to be as follows Yoar Sales in Units 1 18 000 2 23,000 3 25 000 4-6 27.000 c. Production and sales of the device would require working capital of 560,000 to finance accounts receivable, inventones, 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 $55 each variable costs for production administration, and sales would be $40 per unit e Fixed costs for salaries, maintenance, property taxes, insurance, and straight-line depreciation on the equipment would total $169,000 per year (Depreciation is based on cost less salvage value) 1. To gain rapid entry into the market the company would have to advertise heavily. The advertising program would be Amount of Yearly Year Advertising 1-2 $ 89,000 3 $ 69 000 4-6 $ 59,000 The company's required rate of return is 15% ottoral te the present value of the cash flows 2- Ung the data computed in (t) above and other data provided in the problem determine there present value of the proposed investment (Any cash outflows should be indicated by a minus sign) Now Costot qument Working Capital Yearly not cash flows Release of working capital Salvage value of equipment Total cash flows Present Nel present value 2b. Would you recommend that Matheson accept the device as a new product Yes NO