Question
Suppose that Calloway golf would like to capitalize on Phil Michelson winning the Open Championship in 2013 by releasing a new putter. The new product
Suppose that Calloway golf would like to capitalize on Phil Michelson winning the Open Championship in 2013 by releasing a new putter. The new product will require new equipment for $401,896.00 that will be depreciated using the 5-year MACRS schedule. The project will run for 2 years with the following forecasted numbers:
| Year 1 | Year 2 | |
|---|---|---|
| Putter price | $60.12 | $60.12 |
| Units sold | 19,214.00 | 10,836.00 |
| COGS | 38.00% of sales | 38.00% of sales |
| Selling and Administrative | 20.00% of sales | 20.00% of sales |
Calloway has a 12.00% cost of capital and a 37.00% tax rate. The firm expects to sell the equipment after 2 years for a NSV of $129,280.00.
What is the NPV of the project?
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Recent Advances And Applications In Alternative Investments
Authors: Constantin Zopounidis, Dimitris Kenourgios ,George Dotsis
1st Edition
1799824365,179982439X
