Sneaker buses ease team had compiled the following baseline information surrounding the$1.$ The life of the Sneaker $2013$ project was expected to be six years. Assume the analysis took place at the end of $2012.$The suggested retail price of the shoe was $$190.$ Gross margins for high$-$end athletic footwear averaged about $40\%$ at the retail level, meaning each pair sold would net New Balance $$115.$ The global athletic footwear market in $2011$ totaled approximately $$74\mathrm{.}5$ billion and was expected to grow at a CAGR of $1\mathrm{.}8\%$ from $2011$ to $2018,$ reaching $$84\mathrm{.}4$ billion by $2018\mathrm{.}3$ Based on market research and analysis of other recent athlete endorsements, the New Balance marketing division estimated the following sales volumes for Sneaker $2013$:Year$201320142015201620172018$Pairs sold $($millions$)1\mathrm{.}2$ in $20131\mathrm{.}6$ in $20141\mathrm{.}4$ in $20152\mathrm{.}4$ in $20161\mathrm{.}8$ in $20170\mathrm{.}9$ in $2018$The $2016$ number assumed Kirani James participated in the $2016$ games in Rio de Janeiro, Brazil, and won at least one medal$\mathrm{.}44.$ For the first two years, the introduction of Sneaker $2013$ would reduce sales of existing New Balance shoes as follows:Lost sales:$2013$: $$35$ million$2014$: $$15$ millionAssume the lost revenue had the same margins as Sneaker $2013\mathrm{.}1.$ In order to produce the shoe, the firm needed to build a factory in Vietnam. This required an immediate outlay of $$150$ million, to be depreciated on a $39-$year MACRSS basis. Depreciation percentages for the first six years respectively were: $2\mathrm{.}6\%,5\%,4\mathrm{.}7\%,4\mathrm{.}5\%,4\mathrm{.}3\%,$ and $4\mathrm{.}0\%.$ The firm's analysts estimated the building would be sold for $$102$ million at project termination. This "salvage value" has not been taken into consideration when computing annual depreciation charges.Sneaker buses ease team had compiled the following baseline information surrounding the$1.$ The life of the Sneaker $2013$ project was expected to be six years. Assume the analysis took place at the end of $2012.$The suggested retail price of the shoe was $$190.$ Gross margins for high$-$end athletic footwear averaged about $40\%$ at the retail level, meaning each pair sold would net New Balance $$115.$ The global athletic footwear market in $2011$ totaled approximately $$74\mathrm{.}5$ billion and was expected to grow at a CAGR of $1\mathrm{.}8\%$ from $2011$ to $2018,$ reaching $$84\mathrm{.}4$ billion by $2018\mathrm{.}3$ Based on market research and analysis of other recent athlete endorsements, the New Balance marketing division estimated the following sales volumes for Sneaker $2013$:Year$201320142015201620172018$Pairs sold $($millions$)1\mathrm{.}2$ in $20131\mathrm{.}6$ in $20141\mathrm{.}4$ in $20152\mathrm{.}4$ in $20161\mathrm{.}8$ in $20170\mathrm{.}9$ in $2018$The $2016$ number assumed Kirani James participated in the $2016$ games in Rio de Janeiro, Brazil, and won at least one medal$\mathrm{.}44.$ For the first two years, the introduction of Sneaker $2013$ would reduce sales of existing New Balance shoes as follows:Lost sales:$2013$: $$35$ million$2014$: $$15$ millionAssume the lost revenue had the same margins as Sneaker $2013\mathrm{.}1.$ In order to produce the shoe, the firm needed to build a factory in Vietnam. This required an immediate outlay of $$150$ million, to be depreciated on a $39-$year MACRSS basis. Depreciation percentages for the first six years respectively were: $2\mathrm{.}6\%,5\%,4\mathrm{.}7\%,4\mathrm{.}5\%,4\mathrm{.}3\%,$ and $4\mathrm{.}0\%.$ The firm's analysts estimated the building would be sold for $$102$ million at project termination. This "salvage value" has not been taken into consideration when computing annual depreciation charges.