As part of its planning for the coming Christmas season, Criswell Motorsports is considering whether to expand its product line that currently consists of skateboards to include gas-powered skateboards. The company feels it can sell 2,000 of these per year for 10 years (after which time this project is expected to shut down, with solar-powered skateboards taking over). Each gas-powered skateboard would have variable costs of $40 and sell for $200; annual fixed costs associated with production would be $160,000. In addition, there would be a $450,000 initial expenditure associated with the purchase of new production equipment. It is assumed that the simplified straight-line method would be used to depreciate this initial expenditure down to zero over 10 years. The project would also require a one-time initial investment of $50,000 in net working capital associated with inventory, and this working-capital investment would be recovered when the project is shut down. Finally, the firms marginal tax rate is 34 percent.

a. What is the initial outlay associated with the project?

b. What are the annual net cashflows associated with this project for Year 1 through 9?

c, What is the terminal cashflow in year 10 (that is what is the free cashflow in Year 10 plus any additional cash flow associated with termination of the project?)

Please no excel. Thank you!