McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $$855$ per

set and have a variable cost of $$415$ per set. The company has spent $$320,000$ for a

marketing study that determined the company will sell $70,000$ sets per year for seven

years. The marketing study also determined that the company will lose sales of $13,400$

sets of its high$-$priced clubs. The high$-$priced clubs sell at $$1,225$ and have variable costs

of $$685.$ The company will also increase sales of its cheap clubs by $15,400$ sets. The

cheap clubs sell for $$445$ and have variable costs of $$235$ per set. The fixed costs each

year will be $$10,650,000.$ The company has also spent $$2,700,000$ on research and

development for the new clubs. The plant and equipment required will cost $$39,000,000$

and will be depreciated on a straight$-$line basis. The new clubs will also require an

increase in net working capital of $$3,400,000$ that will be returned at the end of the

project. The tax rate is $22$ percent, and the cost of capital is $10$ percent.