Calculate Cash Flows Out of Eden, Inc., is planning to invest in new manufacturi

Question

Calculate Cash Flows Out of Eden, 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 8,900 units at $34.00 each. The new manufacturing equipment will cost $125,300 and is expected to have a 10-year life and $9,600 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 $5.80 Direct materials 18.90 Fixed factory overhead-depreciation 1.30 Variable factory overhead 2.90 Total $28.90 Hide 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 answer to the nearest dollar. Out of Eden, Inc. Net Cash Flows Year 1 Years 2-9 Last Year Initial investment $ Operating cash flows: Annual revenues $ $ $ Selling expenses Cost to manufacture Net operating cash flows $ $ $ Total for Year 1 $ Total for Years 2-9 $ Residual value Total for last year $ Check My Work (2 remaining) Icon Key Icon Key Previous Question 3 of 10 Next Exercise 26-4 (Algorithmic) Cengage Learning Cengage Technical Support

Explanation / Answer

net cash flow out of eden garden year 1 year2-9 last year Initial investment 125300 operating cash flow: annual revenues 302600 302600 302600 selling expenses 15130 15130 15130 cost to manufacture 245640 245640 245640 net operating cash flow 41830 41830 41830 total year 1 83470 total year 2-9 41640 residual value 6000 total of last year 47830

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.