Determine Cash FlowsNatural 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 5,600 units at $54 each. The new manufacturing equipment will cost$127,400 and is expected to have a 10-year life and a $9,800 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$9.20Direct materials30.00Fixed factory overhead-depreciation2.10Variable factory overhead4.60Total$45.90Determine 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 thenearest dollar.Natural Foods Inc.Net Cash FlowsYear 1Years 2-9Last YearInitial investmentOperating cash flows:Annual revenues%$4Selling expensesCost to manufactureNet operating cash flows$Total for Year 1Total for Years 2-9 (operating cash flow)Residual valueTotal for last year

Determination of cash flows. Year 1 Initial…

mine Cash Flows al 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 5,600 units at $54 each. The new manufacturing equipment will cost 400 and is expected to have a 10-year life and a $9,800 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: labor $9.20 materials 30.00 factory overhead-depreciation 2.10 ple factory overhead 4.60 Total $45.90 mine 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 indicate cash outflows. Do not round your intermediate calculations but, if required, round your final answers to the st dollar. Natural Foods Inc. Net Cash Flows Year 1 Years 2-9 Last Year al investment ating cash flows: nual revenues lling expenses st to manufacture Net operating cash flows for Year 1 for 2-9 (operating cash flow) sidual value for last year

mine Cash Flows al 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 5,600 units at $54 each. The new manufacturing equipment will cost 400 and is expected to have a 10-year life and a $9,800 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: labor $9.20 materials 30.00 factory overhead-depreciation 2.10 ple factory overhead 4.60 Total $45.90 mine 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 indicate cash outflows. Do not round your intermediate calculations but, if required, round your final answers to the st dollar. Natural Foods Inc. Net Cash Flows Year 1 Years 2-9 Last Year al investment ating cash flows: nual revenues lling expenses st to manufacture Net operating cash flows for Year 1 for 2-9 (operating cash flow) sidual value for last year

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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