a) What is the project cash flow for year 1?

b) What is the project cash flow for year 2? (include the terminal cash flow here)

c) What is the NPV of the project?

(please answer all parts individually)

Suppose that Calloway golf would like to capitalize on Phil Michelson winning the Open Championship in 2013 by releasing a new putter. The new product will require new equipment for $415,048.00 that will be depreciated using the 5- year MACRS schedule. The project will run for 2 years with the following forecasted numbers: Year 1 Year 2 Putter price $64.53 $64.53 Units sold 18,465.00 11,844.00 COGS 40.00% of sales 40.00% of sales Selling and Administrative 19.00% of sales 19.00% of sales Calloway has a 14.00% cost of capital and a 38.00% tax rate. The firm expects to sell the equipment after 2 years for a NSV of $140,222.00