Question
In: Finance
Suppose that Calloway golf would like to capitalize on Phil Michelson winning the Open Championship in...
Suppose that Calloway golf would like to capitalize on Phil Michelson winning the Open Championship in 2013 by releasing a new putter. The new product will require new equipment for $410,451.00 that will be depreciated using the 5-year MACRS schedule. The project will run for 2 years with the following forecasted numbers:
| Year 1 | Year 2 | |
|---|---|---|
| Putter price | $64.13 | $64.13 |
| Units sold | 18,255.00 | 11,608.00 |
| COGS | 42.00% of sales | 42.00% of sales |
| Selling and Administrative | 21.00% of sales | 21.00% of sales |
Calloway has a 13.00% cost of capital and a 37.00% tax rate. The
firm expects to sell the equipment after 2 years for a NSV of
$125,682.00.
What is the NPV of the project?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Suppose that Calloway golf would like to capitalize on Phil Michelson winning the Open Championship in...
Suppose that Calloway golf would like to capitalize on Phil
Michelson winning the Open Championship in 2013 by releasing a new
putter. The new product will require new equipment for $419,159.00
that will be depreciated using the 5-year MACRS schedule. The
project will run for 2 years with the following forecasted
numbers:
Year 1
Year 2
Putter price
$64.17
$64.17
Units sold
19,136.00
11,665.00
COGS
41.00% of sales
41.00% of sales
Selling and Administrative
18.00% of sales
18.00% of sales...
Suppose that Calloway golf would like to capitalize on Phil Michelson winning the Open Championship in...
Suppose that Calloway golf would like to capitalize on Phil
Michelson winning the Open Championship in 2013 by releasing a new
putter. The new product will require new equipment for $402,656.00
that will be depreciated using the 5-year MACRS schedule. The
project will run for 2 years with the following forecasted
numbers:
Year 1
Year 2
Putter price
$61.40
$61.40
Units sold
19,812.00
11,852.00
COGS
41.00% of sales
41.00% of sales
Selling and Administrative
19.00% of sales
19.00% of sales...
Suppose that Calloway golf would like to capitalize on Phil Michelson winning the Open Championship in...
Suppose that Calloway golf would like to capitalize on Phil
Michelson winning the Open Championship in 2013 by releasing a new
putter. The new product will require new equipment for $411,913.00
that will be depreciated using the 5-year MACRS schedule. The
project will run for 2 years with the following forecasted
numbers:
Year 1
Year 2
Putter price
$62.19
$62.19
Units sold
18,951.00
11,500.00
COGS
41.00% of sales
41.00% of sales
Selling and Administrative
21.00% of sales
21.00% of sales...
Suppose that Calloway golf would like to capitalize on Phil Michelson winning the Open Championship in...
Suppose that Calloway golf would like to capitalize on Phil
Michelson winning the Open Championship in 2013 by releasing a new
putter. The new product will require new equipment for $419,159.00
that will be depreciated using the 5-year MACRS schedule. The
project will run for 2 years with the following forecasted
numbers:
Year 1
Year 2
Putter price
$64.17
$64.17
Units sold
19,136.00
11,665.00
COGS
41.00% of sales
41.00% of sales
Selling and Administrative
18.00% of sales
18.00% of sales...
Suppose that Calloway golf would like to capitalize on Phil Michelson winning the Open Championship in...
Suppose that Calloway golf would like to capitalize on Phil
Michelson winning the Open Championship in 2013 by releasing a new
putter. The new product will require new equipment for $420,831.00
that will be depreciated using the 5-year MACRS schedule. The
project will run for 2 years with the following forecasted
numbers:
Year 1
Year 2
Putter price
$63.52
$63.52
Units sold
19,097.00
11,551.00
COGS
38.00% of sales
38.00% of sales
Selling and Administrative
18.00% of sales
18.00% of sales...
Suppose that Calloway golf would like to capitalize on Phil Michelson winning the Open Championship in...
Suppose that Calloway golf would like to capitalize on Phil
Michelson winning the Open Championship in 2013 by releasing a new
putter. The new product will require new equipment for $420,494.00
that will be depreciated using the 5-year MACRS schedule. The
project will run for 2 years with the following forecasted
numbers:
Year 1
Year 2
Putter price
$60.65
$60.65
Units sold
19,049.00
10,768.00
COGS
39.00% of sales
39.00% of sales
Selling and Administrative
19.00% of sales
19.00% of sales...
Suppose that Calloway golf would like to capitalize on Phil Michelson winning the Open Championship in...
Suppose that Calloway golf would like to capitalize on Phil
Michelson winning the Open Championship in 2013 by releasing a new
putter. The new product will require new equipment for $407,903.00
that will be depreciated using the 5-year MACRS schedule. The
project will run for 2 years with the following forecasted
numbers:
Year 1
Year 2
Putter price
$64.37
$64.37
Units sold
18,213.00
11,092.00
COGS
39.00% of sales
39.00% of sales
Selling and Administrative
20.00% of sales
20.00% of sales...
Suppose that Calloway golf would like to capitalize on Phil Michelson winning the Open Championship in...
Suppose that Calloway golf would like to capitalize on Phil
Michelson winning the Open Championship in 2013 by releasing a new
putter. The new product will require new equipment for $414,452.00
that will be depreciated using the 5-year MACRS schedule. The
project will run for 2 years with the following forecasted
numbers:
Year 1
Year 2
Putter price
$62.01
$62.01
Units sold
18,933.00
10,513.00
COGS
41.00% of sales
41.00% of sales
Selling and Administrative
18.00% of sales
18.00% of sales...
Brian plays golf regularly and would like to test the hypothesis that the number of golf...
Brian plays golf regularly and would like to test the hypothesis
that the number of golf balls that he loses during a round follows
the Poisson distribution with an average of 2.0 balls per round. To
test this hypothesis, he has collected the following lost ball data
from a random sample of rounds.
Number of Lost Balls Per Round
Frequency
0
8
1
24
2
11
3
5
4
2
Perform this hypothesis test using α = 0.05.
McGilla Golf has decided to sell a new line of golf clubs and would like to...
McGilla Golf has decided to sell a new line of golf clubs and
would like to know the sensitivity of NPV to changes in the price
of the new clubs and the quantity of new clubs sold. The clubs will
sell for $740 per set and have a variable cost of $340 per set. The
company has spent $144,000 for a marketing study that determined
the company will sell 56,000 sets per year for seven years. The
marketing study also...
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