Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume that the discount rate for

Nagano Golf is $16$ percent

Project A: Nagano NP$-30.$ Professional clubs that will take an initial investment of $$802,000$ at time $0.$ Next five years $($years $1-5)$ of

sales will generate a consistent cash flow of $$339,000$ 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 $$550,000$ at time $0.$ Cash flow at year $1$ is

$$220,000.$ 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 table: $($Do not round intermediate calculations. Round the $"$PI$"$ answers to $3$ decimal places and other

answers to $2$ decimal places. Omit $ sign in your response. Omit $\text{'}\%\text{'}$ sign in your response.$)$

Net present value

Internal rate of return

Incremental internal rate of return

Profitability index

NP$-30$

$

$Nx-20$

$6$

$

Implications

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