Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

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 $395 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-price clubs. The price clubs sell at $1,100 and have variable costs of $650. The company will also increase sales of its cheap clubs by 12,000 sets. The cheap clubs sell for $410 and have variable cost of $185 per set. The fixed costs each year will be $9,200,000. The company has also spent $1,000,000 on research and development for the new clubs. The plant and equipment required will cost $29,400,000 and will be depreciated on a straight-line basis. The new clubs will also require increase in new working capital of $1,400,000 that will be returned at the end of the project. The capital rate is 40 percent, and the cost of capital is 10 percent. find out and show the work for the payback period, the NPV, and the IRR.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M944107

Have any Question? 


Related Questions in Basic Finance

1 why is notional principal often exchanged in a currency

1. Why is notional principal often exchanged in a currency swap but not in an interest rate or equity swap? Why would the parties to a currency swap choose not to exchange the notional principal? 2 .Explain how the follo ...

You are the auditor of piedmore corporation you determine

You are the auditor of Piedmore Corporation. You determine that the accounts receivable turnover has been much slower this period than in prior periods and that it is also materially lower than the industry average. How ...

Question 1 - planning and strategic inputbriefcompany x is

Question 1 - Planning and strategic input Brief: Company X is a department Store with 100outlets, selling a wide range of household and clothing products. Traditionally they have used Press advertising to drive awareness ...

A lsquolsquocooling bag commonly used for storing water in

A ‘‘cooling bag,'' commonly used for storing water in hot, arid environments is made of a thin porous fabric. A small amount of water diffuses through the fabric and evaporates from the surface of the bag. The rate of ev ...

The hudson corporation makes an investment of 24000 that

The Hudson Corporation makes an investment of $24,000 that provides the following cash flow: Year Cash Flow 1................ $ 13,000 2................ 13,000 3................ 4,000 a. What is the net present value at ...

In april 2010 christina romer who was then serving as chair

In April 2010, Christina Romer, who was then serving as chair of the President's Council of Economic Advisers, argued: "The overwhelming weight of the evidence is that the current very high-and very disturbing-levels of ...

Question 1 according to the text a risk-averse investor

Question 1. According to the text, a risk-averse investor _____. demands a premium for assuming risk will only participate in low-risk or risk-free investments is one of a small minority in the United States More than on ...

Grind co is considering replacing an existing machine the

Grind Co. is considering replacing an existing machine. The new machine is expected to reduce labor costs by $153,000 per year for 5 years. Depreciation on the new machine is $124,000 compared with $86,000 on the old mac ...

1 explain the rationale behind the t-test2 write the

1. Explain the rationale behind the t-test. 2. Write the formula for at-test. 3 Distinguish between one-tailed and two-tailed t-tests.

1 what does it mean to say that a currency trades at a

1. What does it mean to say that a currency trades at a forward premium? 2. Explain how the law of one price establishes a relationship between changes in currency values and inflation rates. 3. Why does purchasing power ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen