Suppose that Supreme 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 $424,009.00 that will be depreciated using the 5- year MACRS schedule (year 1: 20%). The project will run for 2 years with the following forecasted numbers:

Year 1 Year 2

Putter price $64.47 $64.47

Units sold 19,244.00 11,509.00

COGS 42.00% of sales 42.00% of sales

Selling and Administrative 19.00% of sales 19.00% of sales

Supreme golf has a 14.00% cost of capital and a 36.00% tax rate. The firm expects to sell the equipment after 2 years for a NSV of $165,175.00.

What is the project cash flow for year 1?

Suppose that Supreme 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 $424,009.00 that will be depreciated using the 5- year MACRS schedule (year 2: 32%). The project will run for 2 years with the following forecasted numbers:

Supreme golf has a 14.00% cost of capital and a 36.00% tax rate. The firm expects to sell the equipment after 2 years for a NSV of $165,175.00.

What is the project cash flow for year 2?