You are evaluating a project for The Ultimate recreational tennis racket, guaranteed to correct that wimpy backhand. You estimate the sales price of The Ultimate to be $$300$ per unit and sales volume to be $1,000$ units in year $1,1,250$ units in year $2,$ and $1,325$ units in year $3.$ The project has a three$-$year life. Variable costs amount to $$200$ per unit and fixed costs are $$50,000$ per year. The project requires an initial investment of $$150,000$ in assets that 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 $$25,000.$ NWC requirements at the beginning of each year will be approximately $10$ 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 will the free cash flow for this project be in year $2?$

Multiple Choice

$$107,250$

$$102,450$

$$53,000$

$$49,950$