Suppose that Calloway golf would like to capitalize on Phil Michelson winning the Open Championship in...

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Suppose that Calloway golf would like to capitalize on PhilMichelson winning the Open Championship in 2013 by releasing a newputter. The new product will require new equipment for $407,903.00that will be depreciated using the 5-year MACRS schedule. Theproject will run for 2 years with the following forecastednumbers:
Year 1 Year 2
Putter price $64.37 $64.37
Units sold 18,213.00 11,092.00
COGS 39.00% of sales 39.00% of sales
Selling and Administrative 20.00% of sales 20.00% of sales

Calloway has a 13.00% cost of capital and a 37.00% tax rate. Thefirm expects to sell the equipment after 2 years for a NSV of$164,751.00.
What is the project cash flow for year 2?(include the terminal cash flow here)

	Year 1	Year 2
Putter price	$64.37	$64.37
Units sold	18,213.00	11,092.00
COGS	39.00% of sales	39.00% of sales
Selling and Administrative	20.00% of sales	20.00% of sales

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Formula Year n 0 1 2 Capital investment CI 40790300 Putter price p 6437 6437 Units sold u 1821300 1109200 pu Sales S 117237081 71399204 39S COGS 45722462 27845690 20S See Answer

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Suppose that Calloway golf would like to capitalize on PhilMichelson winning the Open Championship in 2013 by releasing a newputter. The new product will require new equipment for $407,903.00that will be depreciated using the 5-year MACRS schedule. Theproject will run for 2 years with the following forecastednumbers:Year 1Year 2Putter price$64.37$64.37Units sold18,213.0011,092.00COGS39.00% of sales39.00% of salesSelling and Administrative20.00% of sales20.00% of salesCalloway has a 13.00% cost of capital and a 37.00% tax rate. Thefirm expects to sell the equipment after 2 years for a NSV of$164,751.00.What is the project cash flow for year 2?(include the terminal cash flow here)