McGilla Golf has decided to sell a new line of golf clubs. Theclubs will sell for $850 per set and have a variable cost of $410per set. The company has spent $310,000 for a marketing study thatdetermined the company will sell 69,700 sets per year for sevenyears. The marketing study also determined that the company willlose sales of 13,200 sets of its high-priced clubs. The high-pricedclubs sell at $1,220 and have variable costs of $680. The companywill also increase sales of its cheap clubs by 15,200 sets. Thecheap clubs sell for $440 and have variable costs of $230 per set.The fixed costs each year will be $10,600,000. The company has alsospent $2,600,000 on research and development for the new clubs. Theplant and equipment required will cost $38,900,000 and will bedepreciated on a straight-line basis. The new clubs will alsorequire an increase in net working capital of $3,300,000 that willbe returned at the end of the project. The tax rate is 21 percent,and the cost of capital is 9 percent.

a. Calculate the payback period. (Do not round intermediatecalculations and round your answer to 3 decimal places, e.g.,32.161.) \

b. Calculate the NPV. (Do not round intermediate calculationsand round your answer to 2 decimal places, e.g., 32.16.)

c. Calculate the IRR. (Do not round intermediate calculationsand enter your answer as a percent rounded to 2 decimal places,e.g., 32.16.)

a.Payback period:_______years

b. NPV____

c.IRR