Calculate cash flows. Calculate Cash FlowsNature'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 of5,600 units at $50 each. The new manufacturing equipment will cost $115,200 and is expected to have a 10-year life and $8,800 residual value. Selling expensesrelated 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:Direct labor$8.5Direct materials27.8Fixed factory overhead-depreciation1.9Variable factory overhead4.3Total$42.5Determine 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 roundyour intermediate calculations but, if required, round your final answer to the nearest dollar.Nature's Way Inc.Net Cash FlowsYear 1Years 2-9Last YearInitial investment115,200Operating cash flows:Annual revenues280,000280,000280,000 VSelling expenses11,20011,20011,200 XCost to manufacture227,360 X227,360 X227,360 X 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 roundyour intermediate calculations but, if required, round your final answer to the nearest dollar.Nature's Way Inc.Net Cash FlowsYear 1Years 2-9Last YearInitial investment115,200XOperating cash flows:Annual revenues280,000280,000280,000Selling expenses11,200 X11,200 X11,200 xCost to manufacture227,360 X227,360 X227,360XNet operating cash flows41,44041,44041,440Total for Year 173,760 XTotal for Years 2-941,440Residual value8,800Total for last year50,240

Net operating cash flows are the amount which is generated by the company in cash after charging for…

Answered: Calculate cash flows.

Business

Finance

Calculate cash flows.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 4E: Determine cash flows Natural Foods Inc. is planning to invest in new manufacturing equipment to make...

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