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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 $408,030.00 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 | $64.56 | $64.56 |
Units sold | 18,023.00 | 10,324.00 |
COGS | 41.00% of sales | 41.00% of sales |
Selling and Administrative | 19.00% of sales | 19.00% of sales |
Calloway has a 13.00% cost of capital and a 39.00% tax rate. The firm expects to sell the equipment after 2 years for a NSV of $132,154.00.
What is the project cash flow for year 2? (include the terminal cash flow here)
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