c11-q22

McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $821 per set and have a variable cost of $443 per set. The company has spent $106,659 for a marketing study that determined the company will sell 5,276 sets per year for seven years. The marketing study also determined that the company will lose sales of 929 sets of its high-priced clubs. The high-priced clubs sell at $1,067 and have variable costs of $732. The company will also increase sales of its cheap clubs by 1,042 sets. The cheap clubs sell for $477 and have variable costs of $238 per set. The fixed costs each year will be $938,084. The company has also spent $100,408 on research and development for the new clubs. The plant and equipment required will cost $2,840,594 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $129,836 that will be returned at the end of the project. The tax rate is 32 percent, and the cost of capital is 12 percent. What is the sensitivity of the NPV to changes in the quantity of the new clubs sold