Business, 22.04.2020 00:34 ayoismeisjjjjuan

Masters Golf Products, Inc., spent 4 years and $ 1 comma 200 comma 000 to develop its new line of club heads to replace a line that is becoming obsolete. To begin manufacturing them, the company will have to invest $ 1 comma 790 comma 000 in new equipment. The new clubs are expected to generate an increase in operating cash inflows of $ 746 comma 000 per year for the next 13 years. The company has determined that the existing line could be sold to a competitor for $ 254 comma 000. a. How should the $ 1 comma 200 comma 000 in development costs be classified? b. How should the $ 254 comma 000 sale price for the existing line be classified? c. What are all the relevant cash flows for years 0 thru 13? (Note: Assume that all of these numbers are net of taxes.)

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Masters Golf Products, Inc., spent 4 years and $ 1 comma 200 comma 000 to develop its new line of cl...

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