Account ..... Determine Cash FlowsNatural Foods Inc. is planning to invest in new manufacturing equipment to make a newgarden tool. The new garden tool is expected to generate additional annual sales of8,300 units at $32 each. The new manufacturing equipment will cost $107,900 and isexpected to have a 10-year life and a $8,300 residual value. Selling expenses related tothe new product are expected to be 4% of sales revenue. The cost to manufacture theproduct includes the following on a per-unit basis:Direct laborDirect materialsFixed factory overhead-depreciationVariable factory overheadTotalInitial investmentOperating cash flows:Annual revenuesSelling expensesCost to manufactureNetTotal for Year 1Tutal for Years 2-9 (operating cash flow)Residual valueTotal for last year$5.40Determine the net cash flows for the first year of the project, Years 2-9, and for the lastyear of the project. Use the minus sign to indicate cash outflows. Do not round yourintermediate calculations but, if required, round your final answers to the nearest dollar.Natural Foods Inc.Net Cash Flowsoperating cash flows17.901.202.70$27.20Year 1 Years 2-9 Last Year

Residual value is the value of any asset left at the end of useful life of an asset. Depreciation is…

Determine Cash Flows 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 8,300 units at $32 each. The new manufacturing equipment will cost $107,900 and is expected to have a 10-year life and a $8,300 residual value. Selling expenses related to the new product are expected to be 4% of sales revenue. The cost to manufacture the product includes the following on a per-unit basis: $5.40 17.90 Direct labor Direct materials Fixed factory overhead-depreciation Variable factory overhead Total 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. Natural Foods Inc. Net Cash Flows Initial investment Operating cash flows Annual revenues Selling expenses Cost to manufacture Net Total for Year 1 operating cash flows 1.20 2.70 $27.20 Total for Years 2-9 (operating cash flow) Residual value Total for last year Year 1 Years 2-9 Last Year