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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

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 $402,686.00 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 $64.76 $64.76
Units sold 19,901.00 11,799.00
COGS 42.00% of sales 42.00% of sales
Selling and Administrative 18.00% of sales 18.00% of sales

Calloway has a 15.00% cost of capital and a 40.00% tax rate. The firm expects to sell the equipment after 2 years for a NSV of $135,407.00.

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

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