McGilla Golf is evaluating a new golf club. The clubs will sell for $1,000 per set...

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McGilla Golf is evaluating a new golf club. The clubs will sellfor $1,000 per set and have a variable cost of $450 per set. Thecompany has spent $157,500 for a marketing study that determinedthe company will sell 50,500 sets per year for seven years. Themarketing study also determined that the company will lose sales of9,500 sets of its high-priced clubs. The high-priced clubs sell at$1,500 and have variable costs of $630. The company also willincrease sales of its cheap clubs by 12,100 sets. The cheap clubssell for $450 and have variable costs of $180 per set. The fixedcosts each year will be $9,650,000. The company has also spent$1,175,000 on research and development for the new clubs. The plantand equipment required will cost $31,150,000 and will bedepreciated on a straight-line basis to a zero salvage value. Thenew clubs also will also require an increase in net working capitalof $2,530,000 that will be returned at the end of the project. Thetax rate is 22 percent and the cost of capital is 15 percent. Whatis the senstivity of the NPV to changes in the price and quantitysold of the new clubs? (Do not round intermediate calculations andround your answers to 2 decimal places, e.g., 32.16.)

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McGilla Golf is evaluating a new golf club. The clubs will sellfor $1,000 per set and have a variable cost of $450 per set. Thecompany has spent $157,500 for a marketing study that determinedthe company will sell 50,500 sets per year for seven years. Themarketing study also determined that the company will lose sales of9,500 sets of its high-priced clubs. The high-priced clubs sell at$1,500 and have variable costs of $630. The company also willincrease sales of its cheap clubs by 12,100 sets. The cheap clubssell for $450 and have variable costs of $180 per set. The fixedcosts each year will be $9,650,000. The company has also spent$1,175,000 on research and development for the new clubs. The plantand equipment required will cost $31,150,000 and will bedepreciated on a straight-line basis to a zero salvage value. Thenew clubs also will also require an increase in net working capitalof $2,530,000 that will be returned at the end of the project. Thetax rate is 22 percent and the cost of capital is 15 percent. Whatis the senstivity of the NPV to changes in the price and quantitysold of the new clubs? (Do not round intermediate calculations andround your answers to 2 decimal places, e.g., 32.16.)