3. The price of the new ball (the Medallion LS) will be $1.10 in year 1, $1.05 in years 2 and 3, and $1 in years 4-6. 4. Cost of goods sold will be $.60 per unit each year for the old ball and $.63 for the new ball. 5. The annual cash flow projections of Price Increase should be raised by 10 percent (see Exhibit 5a). 6. The annual cash flows of the Expand (equipment) option remain as originally projected (see Exhibit 5b). 7. The annual cash flow projections of the Accessories Division for years 1996 (t + 1) 2001 (t + 6) should be reduced by 20 percent (see Exhibit 2). 8. The appropriate discount rates are 10 percent for Keep Old, 11 per- cent for Pull Old, 10 percent for Price Increase, 13 percent for Expand (equipment), and 11 percent for Accessories.