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question 91

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Use the information for the question(s) below.
The Sisyphean Corporation is considering investing in a new cane manufacturing machine that has an estimated life of three years.The cost of the machine is $30,000 and the machine will be depreciated straight line over its three-year life to a residual value of $0.
The cane manufacturing machine will result in sales of 2000 canes in year 1.Sales are estimated to grow by 10% per year each year through year three.The price per cane that Sisyphean will charge its customers is $18 each and is to remain constant.The canes have a manufacturing cost of $9 each.
Installation of the machine and the resulting increase in manufacturing capacity will require an increase in various net working capital accounts.It is estimated that the Sisyphean Corporation needs to hold 2% of its annual sales in cash,4% of its annual sales in accounts receivable,9% of its annual sales in inventory,and 5% of its annual sales in accounts payable.The firm is in the 21% tax bracket,and has a cost of capital of 10%.
-The change in Net working capital from year one to year two is closest to:

Definitions:

Reinforce Correct

A learning strategy that involves strengthening desired behaviors or responses through positive reinforcement techniques.

Job Instruction

A structured method of training where an individual is taught how to perform their job effectively and efficiently through step-by-step instructions.

Successful Job

A role where the individual achieves set objectives, feels engaged and satisfied, and contributes positively to the organization's goals.

Self-Efficacy

An individual’s belief in their capacity to execute behaviors necessary to produce specific performance attainments.