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Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume the discount rate for both products is 14 percent. Project
Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume the discount rate for both products is 14 percent. Project A: Project B: Nagano NP-30. Professional clubs that will take an initial investment of $580,000 at Year 0. For each of the next 5 years, (Years 1-5), sales will generate a consistent cash flow of $215,000 per year. Year 012345 Introduction of new product at Year 6 will terminate further cash flows from this project. Nagano NX-20. High-end amateur clubs that will take an initial investment of $440,000 at Year 0. Cash flow at Year 1 is $130,000. 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. NP-30 -$580,000 NX-20 -$440,000 215,000 130,000 215,000 143,000 215,000 157,300 215,000 173,030 215,000 190,333 Complete the following table: (Do not round intermediate calculations. Round your "PI" answers to 3 decimal places, e.g., 32.161, and other answers to 2 decimal places, e.g., 32.16. Enter your IRR answers as a percent.) Payback IRR Pl NPV NP-30 NX-20 years % years %
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