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

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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 percent, and the cost of capital is 13
percent.
Answer:
A) Payback Period = __________ years
B) Net Present Value = __________
C) Internal Rate of Return = __________%