ABC Golf Equipment Corporation is considering venturing

ABC Golf Equipment Corporation is considering venturing into the golf club manufacturing business with a new driver golf club. As the CFO, it is your job is to add the financial perspective to the decision. It is estimated that the current cost (t=0) of the machinery to create the golf club would cost $2,050,000 including all installation expenses. The company also expects to have to maintain $100,000 of inventories associated with the manufacturing of the golf clubs. The machinery is expected to last ten years. The production equipment is expected to last ten years. The project’s cash inflows are expected at begin during year 1 (t=1) and continue through all ten years (t=10). The company expects to sell 500 golf clubs per year at an anticipated price of $500 per golf club. Operating costs, excluding depreciation, are anticipated to be 75% of sales each year. The project’s cost of capital is 12% and the firm’s tax rate is 35%. Determine the project’s cash flows for years t=0 to t=10.