Calculate Cash Flows Nature's Way Inc. is planning to invest in new manufacturing equipment to make a new garden tool. The garden tool is expected to generate additional annual sales of 9,400 units at $48 each. The new manufacturing equipment will cost $183,200 and is expected to have a 10-year life and $14,000 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 $8.2 Direct materials 26.7 Fixed factory overhead-depreciation 1.8 Variable factory overhead 4.1 Total $40.8 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 reguired, round your final answer to the nearest dollar. Nature's Way Inc. Net Cash Flows Year 1 Years 2-9 Last Year Initial investment Operating cash flows:

Calculate Cash Flows Nature's Way Inc. is planning to invest in new manufacturing equipment to make a new garden tool. The garden tool is expected to generate additional annual sales of 9,400 units at $48 each. The new manufacturing equipment will cost $183,200 and is expected to have a 10-year life and $14,000 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 $8.2 Direct materials 26.7 Fixed factory overhead-depreciation 1.8 Variable factory overhead 4.1 Total $40.8 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 reguired, round your final answer to the nearest dollar. Nature's Way Inc. Net Cash Flows Year 1 Years 2-9 Last Year Initial investment Operating cash flows:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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