Calculate the payback period

Assignment Help Accounting Basics

Reference no: EM132211403

Question: McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $875 per set and have a variable cost of $430 per set. The company has spent $150,000 on a marketing study that determined the company will sell 60,000 sets per year for 7 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 $620. The company will also increase sales of its cheap clubs by 15,000 sets. The cheap cubs sell for $400 and have variable costs of $210 per set. The fixed costs per year will be $9,300,000. The company has also spent $1,000,000 on research and development for the new clubs. The plant and equipment will cost $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%, and the cost of capital is 14%. Calculate the payback period, the NPV, and the IRR.

Reference no: EM132211403

Questions Cloud

Write a program segement in assembly language : Write a program segement in assembly language to read 10 integer numbers and store them into a one dimensional array. The program should calculate.

Print the input file data to an output file : Write a program that reads an input file then print the input file data to an output file

Draw the dependency diagram : Assignment Task - Given that information, draw the dependency diagram. Make sure that you label the transitive and/or partial dependencies

What price would the bonds sell : Dooley, Inc., has outstanding $100 million bonds that pay an annual coupon rate of interest of 11 percent. Par value of each bond is $1,000.

Calculate the payback period : McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $875 per set and have a variable cost of $430 per set.

Discuss differences between the two professions : Discuss the similarities and the differences between the two professions in general terms. Examine the difference between internal and external auditing.

Calculate user weight on planets : Write a program that reads user weight (between 40 kg and 200 kg) and calculates user weight on planets.

How would you explain the closing process to anne marie : Anne Marie, the owner of Anne's Beauty Salon, comes to see you again. She tells you that she has one more question for you. She told you that her accountant.

Count the occurrence of each number : Write a program that reads at most 100 integers between 1 and 100 and counts the occurrence of each number. Assume the input ends with 0.

User Account

All Pages