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McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $838 per set and have a variable cost

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McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $838 per set and have a variable cost of $374 per set. The company has spent $152,370 for a marketing study that determined the company will sell 5,436 sets per year for seven years. The marketing study also determined that the company will lose sales of 933 sets of its high-priced clubs. The high-priced clubs sell at $1,135 and have variable costs of $722. The company will also increase sales of its cheap clubs by 1,134 sets. The cheap clubs sell for $461 and have variable costs of $258 per set. The fixed costs each year will be $890,862. The company has also spent $110,068 on research and development for the new clubs. The plant and equipment required will cost $2,863,229 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $129,352 that will be returned at the end of the project. The tax rate is 28 percent, and the cost of capital is 11 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 project NPV change if I increase sell one more set of the new clubs each year]. You do not need to work through the whole problem again. Focus only on the one thing that has changed. Ask yourself how much additional after-tax revenue would be created annually if I sell one more set of new clubs. Whatever this amount is, it will remain constant over each of the 7 years of the project. Now you can solve it as a simple NPV of an annuity. (Do not round intermediate calculations and round your final answer to the nearest dollar. Omit the "\$" sign and commas in your response. For example, $12,345.6789 should be entered as 12346.)

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