What are all the relevant cash flows for years

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Reference no: EM131329846

Masters Golf Products, Inc, spent 4 years and $1,140,000 to develope its new line of club heads to replace a line that is becoming obsolete. To begin manufactoring them, the company will have to invest $1,770,000 in new equipment. The new clubs are expected to generate an increase in operating cashflows of $746,000 per year for the next 14 years/ The company has determined that the existing line could be sold to a competitor for $254,000.

a. How should the $1,140,000 in development be classified?

b. How should the $254,000 sale price for the existing line be classified?

c. What are all the relevant cash flows for years 0 through 14?

?(Note: Assume that all of these numbers are net of? taxes.)

Reference no: EM131329846

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