Marco is plans to retire in 18 years. He wants you to assume he will be retired for 15 years before he dies. You calculated that Marco needs $1,760,621 as a lump sum at the beginning of retirement. Use an investment return of 5 percent and an inflation assumption of 3.3 percent. How much money will he need to save monthly to have this amount when he begins retirement? (Round the final answer to 2 decimal places) .

1. Marcus Tube, a manufacturer of high-quality aluminum tubing, has maintained stable sales and
profits over the past 10 years. Although the market for aluminum tubing has been expanding by
3% per year, Marcus has been unsuccessful in sharing this growth. To increase its sales, the firm
is considering an aggressive marketing campaign that centers on regularly running ads in all
relevant trade journals and exhibiting products at all major regional and national trade shows.
The campaign is expected to require an annual tax-deductible expenditure of $156,00 over the
next 5 years. Sales revenue, as shown in the income statement for 2020 LOADING..., totaled
$20,800,000 . If the proposed marketing campaign is not initiated, sales are expected to remain at
this level in each of the next 5 years, 2021 through 2025. With the marketing campaign, sales are
expected to rise to the levels shown in the table LOADING... for each of the next 5 years; cost of
goods sold is expected to remain at 80% of sales; general and administrative expense (exclusive
of any marketing campaign outlays) is expected to remain at 8% of sales; and annual
depreciation expense is expected to remain at $480,000. Assuming a 21% tax rate, find the net
cash flows over the next 5 years associated with the proposed marketing campaign.
Marcus Tube Income Statement for the Year Ended December 31, 2020
Sales revenue $20,800,000
Less: Cost of goods sold 16,640,000
Gross profits $4,160,000
Less: Operating expenses
General and administrative expense $1,664,000
Depreciation expense 480,000
Total operating expense $2,144,000
Earnings before interest and taxes $2,016,000
Less: Taxes 423,360
Net operating profit after taxes $1,592,640
Marcus Tube Sales Forecast
Year Sales revenue
2021 $21,300,000
2022 21,800,000
2023 22,300,000
2024 23,300,000
2025 24,300,000
Calculate the net profits after taxes and operating cash flows with the marketing campaign below
for 2021-2025:(Round to the nearest $1,000.)
Marcus Tube
Calculation of Relevant Cash Flow ($000)
2021
Sales

2. $
Cost of good sold (80%)
$
Gross profit
$
Less: Operating expenses
General and administrative expense (8%)
$
Marketing campaign
$
Depreciation
$
Total operating expenses
$
Net profit before taxes
$
Less: Taxes (21%)
$
Net profit after taxes
$
Operating cash flow
$
Incremental cash flow

3. $
Marcus Tube
Calculation of Relevant Cash Flow ($000)
2021
Sales $
Cost of good sold (80%) $
Gross profit $
Less: Operating expenses
General and administrative expense (8%) $
Marketing campaign $
Depreciation $
Total operating expenses $
Net profit before taxes $
Less: Taxes (21%) $
Net profit after taxes $
Operating cash flow $
Incremental cash flow $