eBook Show Me How Print Hom 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 6,500 units at $32 each. The new manufacturing equipment will cost $84,500 and is expected to have a 10-year life and a $6,500 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 $5.40 Direct materials 17.90 Fixed factory overhead-depreciation 1.20 Variable factory overhead 2.70 Total $27.20 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 Year 1 Years 2-9 Last Year Initial investment -$4,500 ✓ Operating cash flows: Annual revenues Selling expenses E Cost to manufacture. Previous Next Net operating cash flows Total for Year 1 Total for Years 2-9 (operating cash flow) Check My Work Total $27.20 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 Years 2-9 Last Year Initial investment Operating cash flows: Annual revenues Selling expenses 28 Cost to manufacture Net operating cash flows i Total for Year 1 Total for Years 2-9 (operating cash flow) Residual value Total for last year Feedback Check My Work For Year 1, subtract the amount to be invested from the operating cash flows (annual revenues less selling expenses less cost to manufacture). For Years 2-10, subtract the selling expenses and the costs to manufacture from the annual revenues. For Year 10 only, add the residual value. Previous Next Check My Work All work saved. Email Instructor Save and Exit Submit Assignment for Gram Year 1 -84,500 ✔