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2. You have also been assigned to evaluate one of Starbucks' potential new investment projects. (This is a fictional project!) Starbucks is considering selling coffee

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2. You have also been assigned to evaluate one of Starbucks' potential new investment projects. (This is a fictional project!) Starbucks is considering selling coffee mugs with the slogan "Black Lives Always Matter at Starbucks" to combat poor publicity at the Starbucks' stores. Estimated information on the project is below. Starbucks expects to sell the mugs for only two years. Mug details Expected price $ 28.00 per mug Expected vaiable costs $ 11.00 per mug Quantity per year year 1 year 2 Expected quantity of mugs sold 80,000 160,000 Fixed costs (advertising, management) $ 1,400,000 per year Cost of equipment year $ 1,000,000 Sale of equipment year 2 $ 400,000 Net working capital details: Initial net working capital needs $ 70,000 time 0 Net working capital years 1 and 2 20% of Revenues $ Marginal tax rate Required rate on project 21% 10% A. What is the cash flow from buying the equipment in year 0? B. What is the cash flow from selling the equipment in year 2 after tax

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