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Wildan Golf has decided to sell a new line of golf clubs. The clubs will sell for RM685 per set and have a variable cost

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Wildan Golf has decided to sell a new line of golf clubs. The clubs will sell for RM685 per set and have a variable cost of RM350 per set. The company has spent RM100, 000 for a marketing study that determined the company will sell 50,000 sets per year for 10 years. The marketing study determined that the company will lose sales of 8,000 sets of high-priced clubs which sell at RM1,100 and have variable costs of RM800. The company will also increase sales of its cheap clubs by 12,000 sets. The cheap clubs sell for RM 300 and have variable costs of RM170 per set. The fixed costs each year will be RM7,600,000. The company has also spent RM680,000 on research and development for the new clubs. The plant and equipment required will cost RMI4,500,000 and will be depreciated on a straight line basis. The tax rate is 35 percent, and the cost of capital is 14 percent. a) Calculate the base case NPV of the project. (10 marks) The company would like to know the sensitivity of NPV to changes in the price of the new clubs and the quantity of the new clubs sold. What is the sensitivity of the NPV to each of these variables

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