Decided to sell new line of golf clubs

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Reference no: EM131991994

ZTX Co. has decided to sell a new line of golf clubs. The clubs will sell for $713 per set and have a variable cost of $330 per set. The company has spent $175422 for a marketing study that determined the company will sell 78967 sets per year for seven years. The marketing study also determined that the company will lose sales of 8618 sets per year of its high-priced clubs. The high-priced clubs sell at $1020 and have variable costs of $517. The company will also increase sales of its cheap clubs by 10902 sets per year. The cheap clubs sell for $389 and have variable costs of $137 per set. The fixed costs each year will be $13869381. The company has also spent $1069284 on research and development for the new clubs. The plant and equipment required will cost $27884243 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $2066330 that will be returned at the end of the project. The tax rate is 35 percent, and the cost of capital is 15 percent. Calculate the NPV for this project. Answer in $ to two decimals.

Reference no: EM131991994

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