Comparing Investment Criteria Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume the discount rate for both products is 15 percent. Project A:Nagano NP-30. Professional clubs that will take an initial investment of $660,000 at Time 0. Next five years (Years 15) of sales will generate a consistent cash flow of $222,000 per year. Introduction of new product at Year 6 will terminate further cash flows from this project. Project B:Nagano NX-20. High-end amateur clubs that will take an initial investment of $420,000 at Time 0. Cash flow at Year 1 is $120,000. In each subsequent year cash flow will grow at 10 percent per year. Introduction of new product at Year 6 will terminate further cash flows from this project.

Year NP-30 NX-20

0 $660,000 $420,000

1 222,000 120,000

2 222,000 132,000

3 222,000 145,200

4 222,000 159,720

5 222,000 175,692

Please fill in the following table:

NP-30 NX-20

Implications

Payback

IRR

PI

NPV