McGilla Golf is evaluating a new line of golf clubs. The clubswill sell for $990 per set and have a variable cost of $445 perset. The company has spent $155,000 for a marketing study thatdetermined the company will sell 50,000 sets per year for sevenyears. The marketing study also determined that the company willlose sales of 9,400 sets of its high-priced clubs. The high-pricedclubs sell at $1,490 and have variable costs of $620. The companyalso will increase sales of its cheap clubs by 12,000 sets. Thecheap clubs sell for $445 and have variable costs of $175 per set.The fixed costs each year will be $9,600,000. The company has alsospent $1,150,000 on research and development for the new clubs. Theplant and equipment required will cost $30,800,000 and will bedepreciated on a straight-line basis to a zero salvage value. Thenew clubs also will require an increase in net working capital of$2,500,000 that will be returned at the end of the project. The taxrate is 21 percent and the cost of capital is 14 percent. Supposeyou feel that the values are accurate to within only ±10percent.

What are the best-case and worst-case NPVs? (Hint: The price andvariable costs for the two existing sets of clubs are known withcertainty; only the sales gained or lost are uncertain.) (Anegative amount should be indicated by a minus sign. Do not roundintermediate calculations and round your answers to 2 decimalplaces, e.g., 32.16.)

Best-case:
Worst-Case: