Natural Foods Inc. is planning to invest in new manufacturing equipment to make a new garden...

 

Transcribed Image Text:

Natural Foods 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 5,800 units at $40 each. The new manufacturing equipment will cost $94,200 and is expected to have a 10-year life and a $7,200 residual value. Selling expenses related to the new product are expected to be 5% 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 $6.80 22.30 1.50 3.40 $34.00 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. Mak Natural Foods 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 5,800 units at $40 each. The new manufacturing equipment will cost $94,200 and is expected to have a 10-year life and a $7,200 residual value. Selling expenses related to the new product are expected to be 5% 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 $6.80 22.30 1.50 3.40 $34.00 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. Mak

Answer rating: 100% (QA)

Lets calculate the net cash flows for the first year years 29 and the last year of the project First ... View the full answer