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Ben Golf has decided to sell a new line of Rolf clubs The clubs will sell for $825 per set and have a variable cost of 77 of revenues Det set. The company has spent $250,000 for a marketing study that determined the company wit sed 90,000 sets per year for seven years. The company also plans to offer a line of golf balls, which are expected to sell for $45/doxen and have a variable cost of $15/dozen. They expect to sell 100.000 doren bas. The feed costs each year will be $15.200,000. The company has also spent $1,000,000 on research and development for the new clubs. The plant and equipment required will cost $25.500.000 and will be depreciated using the MACRS seven-year schedule. The equipment will be sold for 150% of its book value in a 7. The new clubs will also require an increase in networking capital of $1,800,000 that will be returned at the end of the project. The tax rate 25 percent Information for computing the cost of capital is iven in the previous problems 4. Construct the proforma income statement for this project 5. Calculate the NPV of the project. Compute the IRR of the project. 1. Compute the profitability of the project Ben Golf has decided to sell a new line of Rolf clubs The clubs will sell for $825 per set and have a variable cost of 77 of revenues Det set. The company has spent $250,000 for a marketing study that determined the company wit sed 90,000 sets per year for seven years. The company also plans to offer a line of golf balls, which are expected to sell for $45/doxen and have a variable cost of $15/dozen. They expect to sell 100.000 doren bas. The feed costs each year will be $15.200,000. The company has also spent $1,000,000 on research and development for the new clubs. The plant and equipment required will cost $25.500.000 and will be depreciated using the MACRS seven-year schedule. The equipment will be sold for 150% of its book value in a 7. The new clubs will also require an increase in networking capital of $1,800,000 that will be returned at the end of the project. The tax rate 25 percent Information for computing the cost of capital is iven in the previous problems 4. Construct the proforma income statement for this project 5. Calculate the NPV of the project. Compute the IRR of the project. 1. Compute the profitability of the project

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