Baird Golf has decided to sell a new line of golf clubs. The clubs will sell for $715 per set and have a variable cost of $385 per set. The company has spent $150,000 for a marketing study that determined the company will sell 75,000 sets per year for seven years. The marketing study also determined that the company will lose sales of 10,000 sets of its high-priced clubs. The high-priced clubs sell at $1,150 and have variable costs of $620. The company will also increase sales of its cheap clubs by 12,000 sets. The cheap clubs sell for $425 and have variable costs of $195 per set. The fixed costs each year will be $9,400,000. The company has also spent $1,000,000 on research and development for the new clubs. The plant and equipment required will cost $30,100,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $1,400,000 that will be returned at the end of the project. The tax rate is 40%, and the cost of capital is 10%. Suppose you feel that the values are accurate to within only +10%. What are the best-case and worst-case NPVs? (Hint: The price and variable costs for the two existing sets of clubs are known with certainty, only the sales gained or lost are uncertain.) (Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) Best-case Worst-case NPV

Use the following information for all questions. McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $700 per set and have a variable cost of $340 per set. The company has spent $150,000 for a marketing study that determined the company will sell 46,000 sets per year for seven years. The marketing study also determined that the company will lose sales of 12,000 sets of its high-priced clubs. The high-priced clubs sell at $1,100 and have variable costs of $550. The company will also increase sales of its cheap clubs by 20,000 sets. The cheap clubs sell for $300 and have variable costs of $100 per set. The fixed costs each year will be $8,000,000. The company also spent $1,000,000 on research and development for the new clubs. The plant and equipment required will cost $16,100,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $900,000 that will be returned at the end of the project.…

Totally Tanked, Inc. sells tank tops. The firm is considering making some changes in order to achieve its goal of increasing its profit.If it makes no changes, the company anticipates the following for the coming year. Maria, one of the company’s managers suggests the following:  “I think if we cut our price to $17 a tank top, we will increase our sales to 3,700,000 tank tops.   I think that will help us achieve our goal” Question: Mr. Big, the CEO, upon hearing Maria’s plan says “This is great!  We should go forward with your plan since we will increase sales by 700,000 tank tops.”  How would you answer Mr. Big?   # of tank tops to be sold                               3,000,000 Selling price per tank top                                    $20 Variable expense per tank top                          $8 Fixed expenses for the year                        $20,000,000

O’Neil Enterprises produces a line of canned soups for sale at supermarkets across the country. Demand has been “soft” recently and the company is operating at 70 percent of capacity. The company is considering dropping one of the soups, beef barley, in hopes of improving profitability. If beef barley is dropped, the revenue associated with it will be lost and the related variable costs saved. The CFO estimates that the fixed costs will also be reduced by 25 percent.   The following product line statements are available.  Product Broth   Beef Barley   Minestrone Sales $ 32,600     $ 42,800     $ 51,200   Variable costs   22,000       38,600       40,100   Contribution margin $ 10,600     $ 4,200     $ 11,100   Fixed costs allocated to each product line   4,700       6,000       7,100   Operating profit (loss) $ 5,900     $ (1,800 )   $ 4,000       Required: a-1. Complete the following differential cost schedule. a-2. From an operating profit perspective, should O'Neil…

McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $815 per set and have a variable cost of $365 per set. The company has spent $150,000 for a marketing study that determined the company will sell 55,000 sets per year for seven years. The marketing study also determined that the company will lose sales of 10,000 sets of its high-priced clubs. The high-priced clubs sell at $1,345 and have variable costs of $730. The company will also increase sales of its cheap clubs by 12,000 sets. The cheap clubs sell for $445 and have variable costs of $210 per set. The fixed costs each year will be $9.45 million. The company has also spent $1 million on research and development for the new clubs. The plant and equipment required will cost $39.2 million and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $1.85 million that will be returned at the end of the project. The tax rate is 25 percent, and the…

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Alberto Technologies, manufacture and sells an electronic control device for $297. It has costs of $231 to manufacture it. A competitor is bringing a new electronic control device to market that will sell for $253. Marketing manager at Alberto believes it must lower the price to $253 to compete in the market for electronic control device. Marketing manager believes that the new price will cause sales to increase by 12%, even with a new competitor in the market. Alberto's sales are currently 6,000 units per year. What is the target cost per unit if the target operating income is 25% of sales

McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $815 per set and have a variable cost of $365 per set. The company has spent $150,000 for a marketing study that determined the company will sell 55,000 sets per year for seven years. The marketing study also determined that the company will lose sales of 10,000 sets of its high-priced clubs. The high-priced clubs sell at $1,345 and have variable costs of $730. The company will also increase sales of its cheap clubs by 12,000 sets. The cheap clubs sell for $445 and have variable costs of $210 per set. The fixed costs each year will be $9.45 million. The company has also spent $1 million on research and development for the new clubs. The plant and equipment required will cost $39.2 million and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $1.85 million that will be returned at the end of the project. The tax rate is 25 percent, and the…