Question: Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume the discount rate for Nagano Golf is 14 percent. Project A:
Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume the discount rate for Nagano Golf is 14 percent. Project A: Nagano NP-30. Professional clubs that will take an initial investment of $720,000 at time 0. Next five years (Years 15) of sales will generate a consistent cash flow of $320,000 per year. Introduction of new product at Year 6 will terminate further cash flows from this project. Project B: Nagano NX-20. High-end amateur clubs that will take an initial investment of $910,000 at Time 0. Cash flow at Year 1 is $270,000. In each subsequent year cash flow will grow at 10 percent per year. Introduction of new product at Year 6 will terminate further cash flows from this project. Complete the following for project A & B: Payback: IRR: PI: NPV:
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