Question: Need help with the empty slots ins 2a mainly ther present values, than you! Matheson Electronics has just developed a new electronic device that it



Need help with the empty slots ins 2a mainly ther present values, than you!
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 $138,000 and have a six-year useful life. After six years, it would have a salvage value of about $24,000 b. Sales in units over the next six years are projected to be as follows Sales in Units 7,000 12,000 14,000 16,000 4-6 c. Production and sales of the device would require working capital of $46,000 to finance accounts receivable, inventories, and day-to-day cash needs. This working capital would be released at the end of d. The devices would sefor $55 each; variable costs for production, administration, and sales would be $35 e. Fixed costs for salaries, maintenance, property taxes, insurance, and straight-line depreciation on the f. To gain rapid entry into the market, the company would have to advertise heavily. The advertising program the project's life per unit equipment would total $149,000 per year. (Depreciation is based on cost less salvage value.) would be Amount of Yearly Advertising $ 75,000 $55,000 $ 45,000 ear 4-6 g. The company's required rate of return is 13% Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables Required: 1. Compute the net cash inflow (cash receipts less yearly cash operating expenses) anticipated from sale of the device for each vear over the next six vears ear 1 Year 2 Year 3 Year 4-6 Sales in units Sales in dollars Variable expenses Contribution margin 7,000 12,000 14,000 16,000 $ 385,000 660,000$770,000$880,000 560,000 320,000 245,000 420,000 490,000 140,000 240,000 280,000 Fixed expenses 130,000 45,000 175,000 Net cash inflow (outflow) (65,000)S 35,000 S 95,000 S145,000 130,000 75,000 205,000 130,000 75,000 205,000 130,000 55,000 185,000 Salaries and other Advertising Total fixed expenses
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