Project #46844 - Finance - project analysis

Solve a finance problem in Excel. Here is the problem:

 

McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $875 per set and a have a variable cost of $430 per set. The company has spent $150,000 for a marketing study that determined the company will sell 60,000 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 of $620. The company will also incrrease sales of its cheap sets by 15,000 sets. The cheap clubs sell for $400 and have variable costs of $20 per set. The fixed costs each year will be $29,400,000 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 percent, and the cost of capital is 14 percent. Calculate the payback period, the NPV, and the IRR.

Subject Business
Due By (Pacific Time) 11/09/2014 11:59 pm
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