Matheson Electronics has just developed a new electronic device that it believes will have broad market appeal. The company has performed marketing and cost studies that revealed the following information: a. New equipment would have to be acquired to produce the device. The equipment would cost $258,000 and have a six-year useful life. After six years, it would have a salvage value of about $24,000. b. Sales in units over the next six years are projected to be as follows: Year Sales in Units 15,000 20,000 22,000 24,000 1 2 3 4-6 c. Production and sales of the device would require working capital of $58,000 to finance accounts receivable, inventories, and day- to-day cash needs. This working capital would be released at the end of the project's life d. The devices would sell for $45 each; variable costs for production, administration, and sales would be $30 per unit e. Fixed costs for salaries, maintenance, property taxes, insurance, and straight-line depreciation on the equipment would total $147,000 per year. (Depreciation is based on cost less salvage value.) f. To gain rapid entry into the market, the company would have to advertise heavily. The advertising costs would be: Year 1-2 3 4-6 Amount of Yearly Advertising $ 128,000 $ 67,000 $ 57,000 g. The company's required rate of return is 16 %.

The financial manager of Tepung Berhad, Encik Danial, is considering a project which requiresan investment of RM53,000 in a machine. This machine in which will improve the performanceand production quantities of the company’s range of biscuits. At the end of the five-year period,this machine will be scrapped.Encik Danial expects that this project will lead to increased sales for the next five years as follows:Year Sales (‘000 units)1 8002 9003 1,0004 1,1005 1,200The selling price per unit is RM20. Labor and utilities costs are estimated to be RM8 and RM4 perunit respectively. The project requires an increase in net working capital of RM10,000 in the initialyear and will be fully recovered at the end of the project. The company’s required return oninvestment of 15%.Encik Danial thinks that the unit sales, selling price, labor, and utilities cost projections areaccurate to within 15%.Note: The calculation on depreciation, fixed cost and the effect on tax is ignored for this question.…

Lukow Products is investigating the purchase of a piece of automated equipment that will save $150,000 each year in direct labor and inventory carrying costs. This equipment costs $800,000 and is expected to have a 5-year useful life with no salvage value. The company’s required rate of return is 12% on all equipment purchases. Management anticipates that this equipment will provide intangible benefits such as greater flexibility and higher-quality output that will result in additional future cash inflows. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using table. Required: 1. What is the net present value of the piece of equipment before considering its intangible benefits? (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.) 2. What minimum dollar value per year must be provided by the equipment’s intangible benefits to justify the $800,000 investment? (Do not round intermediate…

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