klp.5 cesMcGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $955 perset and have a variable cost of $479 per set. The company has spent $320,000 for amarketing study that determined the company will sell 92,000 sets per year for sevenyears. The marketing study also determined that the company will lose sales of 9,200sets per year of its high-priced clubs. The high-priced clubs sell at $1,385 and havevariable costs of $705. The company will also increase sales of its cheap clubs by 12,000sets per year. The cheap clubs sell for $388 and have variable costs of $177 per set. Thefixed costs each year will be $15,550,000. The company has also spent $2,700,000 onresearch and development for the new clubs. The plant and equipment required will cost$56,900,000 and will be depreciated on a straight-line basis. The new clubs will alsorequire an increase in net working capital of $4,225,000 that will be returned at the endof the project. The tax rate is 22 percent, and the cost of capital is 11 percent.Calculate the payback period, the NPV, and the IRR. (Do not round intermediatecalculations and round your answers to 2 decimal places, e.g., 32.16. Enter your IRRanswer as a percent.)Payback periodNet present valueInternal rate of returnyears%

Name: klp.5 cesMcGilla Golf has decided to sell a new line of golf clubs. Th
Uploaded: 2024-03-20T06:50:59.000Z
Channel: Bartleby
Description: klp.5 cesMcGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $955 perset and have a variable cost of $479 per set. The company has spent $320,000 for amarketing study that determined the company will sell 92,000 sets pe

Capital budgeting is the process by which businesses evaluate and decide on long-term investment…

Answered: Calculate the payback period, the NPV,…

Business

Finance

Calculate the payback period, the NPV, and the IRR. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Enter your IRR answer as a percent.)

Essentials Of Business Analytics

1st Edition

ISBN:9781285187273

Author:Camm, Jeff.

Publisher:Camm, Jeff.

Chapter11: Monte Carlo Simulation

Section: Chapter Questions

Problem 3P

See similar textbooks

Similar questions

McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $739 per set and have a variable cost of $369 per set. The company has spent $159,000 for a marketing study that determined the company will sell 75,900 sets per year for seven years. The marketing study also determined that the company will lose sales of 9,400 sets per year of its high-priced clubs. The high-priced clubs sell at $1,290 and have variable costs of $630. The company will also increase sales of its cheap clubs by 11,900 sets per year. The cheap clubs sell for $349 and have variable costs of $134 per set. The fixed costs each year will be $11,290,000. The company has also spent $1,090,000 on research and development for the new clubs. The plant and equipment required will cost $25,130,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $1,590,000 that will be returned at the end of the project. The tax rate is 35…
McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $905 per set and have a variable cost of $439 per set. The company has spent $220,000 for a marketing study that determined the company will sell 82,000 sets per year for seven years. The marketing study also determined that the company will lose sales of 8,700 sets per year of its high-priced clubs. The high-priced clubs sell at $1,335 and have variable costs of $655. The company will also increase sales of its cheap clubs by 11,000 sets per year. The cheap clubs sell for $348 and have variable costs of $147 per set. The fixed costs each year will be $14,550,000. The company has also spent $1,700,000 on research and development for the new clubs. The plant and equipment required will cost $45,900,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $3,725,000 that will be returned at the end of the project. The tax rate is 22…
McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $965 per set and have a variable cost of $487 per set. The company has spent $340,000 for a marketing study that determined the company will sell 94,000 sets per year for seven years. The marketing study also determined that the company will lose sales of 9,300 sets per year of its high-priced clubs. The high-priced clubs sell at $1,395 and have variable costs of $715. The company will also increase sales of its cheap clubs by 12,200 sets per year. The cheap clubs sell for $396 and have variable costs of $183 per set. The fixed costs each year will be $15,750,000. The company has also spent $2,900,000 on research and development for the new clubs. The plant and equipment required will cost $59,100,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $4,325,000 that will be returned at the end of the project. The tax rate is 24…
McGill Golf has decided to sell a new line of golf clubs. The clubs will sell for $925 per set and have a variable cost of $480 per set. The company has spent $150,000 on 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 8,800 sets per year of its high-priced clubs. The high-priced clubs sell at $1,325 and have variable costs of $640. The company also will increase sales of its cheap clubs by 11,000 sets per year. The cheap clubs sell for $385 and have variable costs of $160 per set. The fixed costs each year will be $14.65 million. The company also has spent $1 million on research and development for the new clubs. The plant and equipment required will cost $30.1 million and will be depreciated on a straight-line basis. The new clubs also will require an increase in net working capital of $3.5 million that will be returned at the end of the project. The tax rate is 23…
McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $840 per set and have a variable cost of $400 per set. The company has spent $290,000 for a marketing study that determined the company will sell 69,100 sets per year for seven years. The marketing study also determined that the company will lose sales of 12,800 sets of its high-priced clubs. The high-priced clubs sell at $1,210 and have variable costs of $670. The company will also increase sales of its cheap clubs by 14,800 sets. The cheap clubs sell for $430 and have variable costs of $220 per set. The fixed costs each year will be $10,500,000. The company has also spent $2,400,000 on research and development for the new clubs. The plant and equipment required will cost $38,700,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $3,100,000 that will be returned at the end of the project. The tax rate is 24 percent, and the cost of…
McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $840 per set and have a variable cost of $400 per set. The company has spent $290,000 for a marketing study that determined the company will sell 69,100 sets per year for seven years. The marketing study also determined that the company will lose sales of 12,800 sets of its high-priced clubs. The high-priced clubs sell at $1,210 and have variable costs of $670. The company will also increase sales of its cheap clubs by 14,800 sets. The cheap clubs sell for $430 and have variable costs of $220 per set. The fixed costs each year will be $10,500,000. The company has also spent $2,400,000 on research and development for the new clubs. The plant and equipment required will cost $38,700,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $3,100,000 that will be returned at the end of the project. The tax rate is 24 percent, and the cost of…
McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $710 per set and have a variable cost of $310 per set. The company has spent $141,000 for a marketing study that determined the company will sell 53,000 sets per year for seven years. The marketing study also determined that the company will lose sales of 8,600 sets of its high-priced clubs. The high-priced clubs sell at $1,010 and have variable costs of $610. The company will also increase sales of its cheap clubs by 10,100 sets. The cheap clubs sell for $350 and have variable costs of $185 per set. The fixed costs each year will be $9,010,000. The company has also spent $1,020,000 on research and development for the new clubs. The plant and equipment required will cost $28,070,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $1,210,000 that will be returned at the end of the project. The tax rate is 22 percent, and the cost of…
Thomas Arr Golf Corp has decided to sell a new line of golf clubs. The clubs will sell for $1000 per set and have a variable cost of $447 per set. The company has spent $560,000 for a marketing study that determined the company will sell 84,000 sets per year for 7 years. The marketing study also determined that the company will lose sales of 8,800 sets per year of its high-priced clubs. The high-priced clubs sell at $1,345 and have variable costs of $665. The company will also increase sales of its cheap clubs by 11,200 sets per year. The cheap clubs sell for $356 and have variable costs of $153 per set. The fixed costs each year will be $14,750,000. The company has also spent $2,000,000 on research and development for the new clubs. The plant and equipment required will cost $48,000,000 and will be depreciated to a book value of zero on a straight-line basis. The equipment useful life is 9 years and the salvage value is subsequently assumed to be $3,000,000. The new clubs will…
McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $860 per set and have a variable cost of $420 per set. The company has spent $330,000 for a marketing study that determined the company will sell 70,300 sets per year for seven years. The marketing study also determined that the company will lose sales of 13,600 sets of its high-priced clubs. The high-priced clubs sell at $1,230 and have variable costs of $690. The company will also increase sales of its cheap clubs by 15,600 sets. The cheap clubs sell for $450 and have variable costs of $240 per set. The fixed costs each year will be $10,700,000. The company has also spent $2,800,000 on research and development for the new clubs. The plant and equipment required will cost $39,100,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $3,500,000 that will be returned at the end of the project. The tax rate is 23 percent, and the cost of…
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 $375 per set. The company has spent $240,000 for a marketing study that determined the company will sell 67,600 sets per year for seven years. The marketing study also determined that the company will lose sales of 11,800 sets of its high-priced clubs. The high-priced clubs sell at $1,185 and have variable costs of $645. The company will also increase sales of its cheap clubs by 13,800 sets. The cheap clubs sell for $405 and have variable costs of $195 per set. The fixed costs each year will be $10,250,000. The company has also spent $1,900,000 on research and development for the new clubs. The plant and equipment required will cost $38,200,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $2,600,000 that will be returned at the end of the project. The tax rate is 24 percent, and the cost of…
McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $825 per set and have a variable cost of $385 per set. The company has spent $260,000 for a marketing study that determined the company will sell 68,200 sets per year for seven years. The marketing study also determined that the company will lose sales of 12,200 sets of its high-priced clubs. The high-priced clubs sell at $1,195 and have variable costs of $655. The company will also increase sales of its cheap clubs by 14,200 sets. The cheap clubs sell for $415 and have variable costs of $205 per set. The fixed costs each year will be $10,350,000. The company has also spent $2,100,000 on research and development for the new clubs. The plant and equipment required will cost $38,400,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $2,800,000 that will be returned at the end of the project. The tax rate is 21 percent, and the cost of…
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…