Problem #1 Blindfold Technologies Inc. (BTI)is considering whether to introduce a new line of hand scanners th computer. These scanners are expected to sell for an average price of $100 each and the company analysts performing the analysis expect that the firm can sell 100,000 units per year at this price for a period of five years, after which time they expect demand for the product to end as a result of a more advanced technology. In addition, the firm's management expects that variable costs will be $20 per unit, and fixed costs, not including depreciation, are forecast to be $1,250,000 per year. To manufacture this product, BTI will need to buy a computerized production machine for $10 million that has an expected life of five years and a residual or salvage value of $500,000. In addition, the firm expects it will have to invest an additional $450,000 in working capital to support the new business. Other pertinent information concerning the business venture is as follows: Initial cost of the machine$10,000,000 Expected Life Salvage value of the machine Working capital requirement Depreciation method Cash fixed cost-excluding depreciation Variable cost per unit Required rate of return or cost of 10% capital Tax rate 5 years $500,000 $450,000 Straight line $1,250,000 per year $22.50 20%