Camptown Togs Inc a children s clothing manufacturer

has always found #4804

Camptown Togs, Inc., a children's clothing manufacturer, has always found payroll processing
to be costly because it must be done by a clerk. The number of piece-goods coupons received
by each employee are collected and the types of tasks performed by each employee are
calculated. Not long ago, an industrial engineer designed a system that partially automates the
process by means of a scanner that reads the piece-goods coupons. Management is
enthusiastic about this system, because it utilizes some personal computer systems that were
purchased recently. It is expected that this new automated system will save $45,000 per year in
labor. The new system will cost about $30,000 to build and test prior to operation. It is expected
that operating costs, including income taxes, will be about $5,000 per year. The system will
have a five-year useful life. The expected net salvage value of the system is estimated to be
$3,000.(a) Identify the cash inflows over the life of the project.(b) Identify the cash outflows over
the life of the project.(c) Determine the net cash flows over the life of the projectView Solution:
Camptown Togs Inc a children s clothing manufacturer has always found

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