Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume the discount...

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Consider two mutually exclusive new product launch projects thatNagano Golf is considering. Assume the discount rate for bothproducts is 14 percent. Project A: Nagano NP-30. Professional clubsthat will take an initial investment of $580,000 at Time 0. Nextfive years (Years 1–5) of sales will generate a consistent cashflow of $215,000 per year. Introduction of new product at Year 6will terminate further cash flows from this project. Project B:Nagano NX-20. High-end amateur clubs that will take an initialinvestment of $440,000 at Time 0. Cash flow at Year 1 is $130,000.In each subsequent year cash flow will grow at 10 percent per year.Introduction of new product at Year 6 will terminate further cashflows from this project. Year NP-30 NX-20 0 –$ 580,000 –$ 440,000 1215,000 130,000 2 215,000 143,000 3 215,000 157,300 4 215,000173,030 5 215,000 190,333
NP-30 NX-20 Payback years years IRR % % PI NPV $ $

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Consider two mutually exclusive new product launch projects thatNagano Golf is considering. Assume the discount rate for bothproducts is 14 percent. Project A: Nagano NP-30. Professional clubsthat will take an initial investment of $580,000 at Time 0. Nextfive years (Years 1–5) of sales will generate a consistent cashflow of $215,000 per year. Introduction of new product at Year 6will terminate further cash flows from this project. Project B:Nagano NX-20. High-end amateur clubs that will take an initialinvestment of $440,000 at Time 0. Cash flow at Year 1 is $130,000.In each subsequent year cash flow will grow at 10 percent per year.Introduction of new product at Year 6 will terminate further cashflows from this project. Year NP-30 NX-20 0 –$ 580,000 –$ 440,000 1215,000 130,000 2 215,000 143,000 3 215,000 157,300 4 215,000173,030 5 215,000 190,333NP-30 NX-20 Payback years years IRR % % PI NPV $ $