Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume the discount rate for both projects is 12 percent.

Project A: Nagano NP-30. Professional clubs that will take an initial investment of $850,000 at Time 0. 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 $600,000 at Time 0. Introduction of new product at Year 6 will terminate further cash flows from this project.

Year NP-30 NX-20

0 $ 850,000 $ 600,000

1 325,000 240,000

2 315,000 240,000

3 290,000 230,000

4 275,000 210,000

5 185,000 165,000

What is the required return?