McGilla Golf has decided to sell a new line of golf clubs. The length of this...
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McGilla Golf has decided to sell a new line of golf clubs. The length of this project is seven years. The company has spent $139,310 on research and development for the new clubs. The plant and equipment required will cost $2,867,998 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $130,383 that will be returned at the end of the project. The OCF of the project will be $860,594. The tax rate is 29 percent, and the cost of capital is 11 percent. What is the NPV for this project? (Negative amount should be indicated by a minus sign. Round your final answer to the nearest dollar amount. Omit the "$" sign and commas in your response. For example, $123,456.78 should be entered as 123457.) McGilla Golf has decided to sell a new line of golf clubs. The length of this project is seven years. The company has spent $139,310 on research and development for the new clubs. The plant and equipment required will cost $2,867,998 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $130,383 that will be returned at the end of the project. The OCF of the project will be $860,594. The tax rate is 29 percent, and the cost of capital is 11 percent. What is the NPV for this project? (Negative amount should be indicated by a minus sign. Round your final answer to the nearest dollar amount. Omit the "$" sign and commas in your response. For example, $123,456.78 should be entered as 123457.)
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Net Present Value NPV OCFt 1 rt Initial Investment Where OCFt is t... View the full answer
Related Book For
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
Posted Date:
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