. MGM Co has decided to sell a new line of golf clubs. The clubswill sell for $850 per set and have a variable cost of $400 perset. The company has spent $300,000 for a marketing study thatdetermined the company will sell 68500 per year for seven years.The marketing study also determined that the company will losesales of 12,400 sets of its high-priced clubs. The high-pricedclubs will sell at $1200 and a variable cost of $660. The companywill also increase sales of its cheap clubs by 14,400 sets. Thecheap clubs sell for $420 and have a variable cost of $210 per set.The fixed cost each year will be $10400,000. The company has alsospent $2,500,000 on research and development for the new clubs. Theplant and equipment required will cost $38,500,000 and it will bedepreciated on a straight-line basis. The new clubs will alsorequire an increase in net working capital of $2900,000 that itwill be returned at the end of the project. The tax rate is 21percent and the cost of capital is 12 percent.

Suppose that you feel that the values are accurate to withinonly ? 10 percent. What arethe best-case and worst-case NPV?s?(hint: The price and variablecost for the two existing set of clubs are known with certainty;only the sales gained or lost are uncertain)