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Bob's Golf Store currently sells Calloey Drivers for $450 each. They are considering selling Titex Drivers also. The Titex driver would sell for $625 each and the company expects to sell 1,500 a year. If they carry the Titex Driver, management feels that their sales of the Calloey Drivers will decline by 550 units. Variable costs on the Calloey Driver are $199 each and $370 each on the Titex Driver. The incremental annual fixed costs related to the Titex Driver are $190,000 and the first years depreciation related to the Titex Drivers is $52,000. The tax rate is 40 percent.
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