Problem: Your company currently sells oversized golf clubs. The Board of Directors wants you to look at replacing them with a line of super-sized clubs. Briefly explain whether the following are relevant cash flows to this analysis and if so, how those cash flows can affects any decision.
a. $300,000 drop in sales from terminating the oversized line of clubs
b. $750,000 in land you own that may be used for the project
c. $200,000 spent on Research and Development last year on oversized clubs
d. $350,000 you will pay to Fred Singles to promote your new clubs
e. $125,000 you will receive by selling the existing production equipment which must be replaced