Suppose that Calloway golf would like to capitalize on Phil Michelson winning the Open Championship in...
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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 will require new equipment for $424,981.00 that will be depreciated using the 5-year MACRS schedule. The project will run for 2 years with the following forecasted numbers: Putter price Units sold COGS Selling and Administrative Year 1 What is the project cash flow for year 1? $63.13 18,272.00 41.00% of sales 19.00% of sales Year 2 $63.13 10,238.00 41.00% of sales Calloway has a 15.00% cost of capital and a 39.00% tax rate. The firm expects to sell the equipment after 2 years for a NSV of $141,850.00. 19.00% of sales 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 $424,981.00 that will be depreciated using the 5-year MACRS schedule. The project will run for 2 years with the following forecasted numbers: Putter price Units sold COGS Selling and Administrative Year 1 What is the project cash flow for year 1? $63.13 18,272.00 41.00% of sales 19.00% of sales Year 2 $63.13 10,238.00 41.00% of sales Calloway has a 15.00% cost of capital and a 39.00% tax rate. The firm expects to sell the equipment after 2 years for a NSV of $141,850.00. 19.00% of sales
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To calculate the project cash flow for year 1 we need to determine the revenue cost of goods sold CO... View the full answer
Related Book For
Accounting for Decision Making and Control
ISBN: 978-1259564550
9th edition
Authors: Jerold Zimmerman
Posted Date:
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