Estimating Project Cash FlowsA manufacturer is considering venturing into the golf club manufacturing business with a new driver golf club. Your job is to determine if the company should create this new driver golf club or not. Regarding the costs at t=0 (today), the machinery to create the golf club would cost $2,000,000. It would cost $50,000 to install the machinery and inventories would increase by $100,000. The machinery is expected to last ten years and would be depreciated with straight-line depreciation. The project is expected to last ten years when the project would be ended. The projects cash inflows are expected at begin at t=1 (that is, year 1) and continue through t=10 (year 10). At t=10, the machinery is anticipated to have a salvage value of $40,000. 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 projects cost of capital is 12% and the firms tax rate is 35%. Determine the projects cash flows for years t=0 to t=10. Please use Excel to estimate the projects cash flows.Then, use Word to answer these questions:1. If the manufacturer plans on using debt to finance the project, should the estimated project cash flows be changed to reflect these interest charges? Why or why not?2. If the manufacturer spent $200,000 studying golf clubs last year, should that cost be taken into account with this analysis? Why or why not?3. If the manufacturer could rent out the factory that is storing the golf club machinery for $80,000 a year, should that be taken into account with this analysis? Why or why not?4. If this golf club manufacturing venture is going to take away profitable sales from the companys main business of manufacturing refrigerators, should that be taken into account in the analysis? Why or why not?Assignment ExpectationsYou are expected to:a. Describe the purpose of the report and provide a conclusion. An introduction and a conclusion are important because many busy individuals in the business environment may only read the first and the last paragraph. If those paragraphs are not interesting, they never read the body of the paper.b. Answer the Case Assignment question(s) clearly and provide necessary details.c. Write clearly and correctlythat is, no poor sentence structure, no spelling and grammar mistakes, and no run-on sentences.d. Provide citations to support your argument and references on a separate page. (All the sources that you listed in the references section must be cited in the paper.) Use APA format to provide citations and references.e. Type and double-space the paper.Whenever appropriate, please use Excel to show supporting computations in an appendix, present financial information in tables, and use the data computed to answer follow-up questions. In finance, in addition to being able to write well, its important to present information in a professional manner and to analyze financial information. This is part of the assignment expectations and will be considered for grading purposes.

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