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McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $761 per set and have a variable cost

McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $761 per set and have a variable cost of $385 per set. The company has spent $148927 for a marketing study that determined the company will sell 5451 sets per year for seven years. The marketing study also determined that the company will lose sales of 922 sets of its high-priced clubs. The high-priced clubs sell at $1059 and have variable costs of $681. The company will also increase sales of its cheap clubs by 1116 sets. The cheap clubs sell for $407 and have variable costs of $235 per set. The fixed costs each year will be $945751. The company has also spent $119493 on research and development for the new clubs. The plant and equipment required will cost $2808451 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $131978 that will be returned at the end of the project. The tax rate is 33 percent, and the cost of capital is 13 percent. What is the sensitivity of the NPV to changes in the quantity of the new clubs sold?

[Hint: Think of this as, "How much will NPV change if I sell one more set of new clubs each year?"]

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