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Help Save & EX Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume that the discount rate for Nagano Golf
Help Save & EX Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume that the discount rate for Nagano Golf is 14 percent Project A: Nagano NP-30. Professional clubs that will take an initial Investment of $897,000 at time O. Next five years (years 1-5) of sales will generate a consistent cash flow of $408.000 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 $640.000 at time 0. Cash flow at year 1 is $270,000. 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 0 1 2 3 4 5 NP-30 -$897,000 408,000 408,000 408,000 408,000 408,000 NX-20 -$640,000 270,000 297,000 326,700 359, 370 395, 307 Complete the following table: (Do not round intermediate calculations. Round the "PI" answers to 3 decimal places and other answers to 2 decimal places. Omit $ sign in your response.) NP-30 NX-20 328659 35.59 Net present value Internal rate of return Incremental internal rate of return Profitability index Implications (Click to select) (Click to select) (Click to select) (Click to select) $
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