You are evaluating the HomeNet project under the following​ assumptions: Sales of 50,000

units in year 1 increasing by 53,000

units per year over the life of the​ project, a year 1 sales price of

$260​/unit, decreasing by 10%

annually and a year 1 cost of $120​/unit

decreasing by 21% annually. In​ addition, new tax laws allow​ 100% bonus depreciation​ (all the depreciation expense occurs when the asset is put into​ use, in this case​ immediately). Research and development expenditures total $15 million in year 0 and​ selling, general, and administrative expenses are $2.8

million per year​ (assuming there is no​ cannibalization). Under these assumptions the unlevered net income is shown in the​ table:



Suppose that HomeNet will have no incremental cash or inventory requirements​ (products will be shipped directly from the contract manufacturer to​ customers). However, receivables related to HomeNet are expected to account for 15%

of annual​ sales, and payables are expected to be 15%

of the annual cost of goods sold.a. Calculate​ HomeNet's net working capital requirements​ (that is, reproduce Table 8.4



under the assumptions​ given).