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You are evaluating a project for The Farstroke golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Farstroke to

You are evaluating a project for The Farstroke golf club, guaranteed to
correct that nasty slice. You estimate the sales price of The Farstroke to
be $400 per unit and sales volume to be 1,000 units in year 1;1,500 units
in year 2; and 1,325 units in year 3. The project has a 3-year life. Variable
costs amount to $225 per unit and fixed costs are $100,000 per year.
The project requires an initial investment of $165,000 in assets, which
will be depreciated straight-line to zero over the three-year project life.
The actual market value of these assets at the end of year 3 is expected
to be $35,000. NWC requirements at the beginning of each year will be
approximately 20 percent of the projected sales during the coming year.
The tax rate is 21 percent and the required return on the project is 10
percent.
What is the operating cash flow for the project in year 2?(Enter your
answer as a whole number.)
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