Need help with the second part only. First part has been answered in BOLD. Thank you!

Gorilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $650 per set and have a variable cost of $320 per set. The company has spent $150,000 for a marketing study that determined the company will sell 55,000 sets per year for seven years, where seven years is the life of the project. The marketing study also determined that the company will lose sales of 13,000 sets per year of its high-priced clubs. The high-priced clubs sell at $1,100 and have variable costs of $600. The company will also increase sales of its cheap clubs by 10,000 sets per year. The cheap clubs sell for $400 and have variable costs of $180 per set. The fixed costs each year will be $7,500,000. The company has also spent $1,000,000 on research and development for the new clubs. The plant and equipment required will cost $18,200,000 and will be depreciated on a straight-line basis over the life of the project. The new clubs will also require an increase in net working capital of $950,000 that will be returned at the end of the project. The tax rate is 40 percent. Due to the extremely competitive and, therefore, risky nature of the golf club business the cost of capital is estimated to be 16 percent. Calculate the NPV and the IRR.

A. NPV = $663,280.34; IRR = 14.15%

D. NPV = $9,103,636.91.43; IRR = 28.24%

C. NPV = $773,180.43; IRR = 17.34%

B. NPV = $7,436,813.40; IRR = 28.24%

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In the previous problem, you feel that the expected values for:

- the unit sales of the new clubs, - the unit price of the new clubs, - the unit variable cost of the new clubs, - the fixed costs - the unit sales lost of the high-priced clubs - the unit sales gained of the cheap clubs are only accurate to within 10 percent. What are the best-case and worst-case NPVs? (Hint: The price and variable costs for the two existing (high-priced and cheap) sets of clubs are known with certainty; only the high-priced and cheap club unit sales - gained or lost - are uncertain. Be careful. For example, you should realize that in a worst-case scenario, unit sales, unit price and sales gained are 10 percent lower, but fixed costs, unit costs and sales lost are 10 percent higher. The opposite would be true in a best case scenario. I cannot set this problem up for you any more than this. Look at the examples in your text for the correct approach.)

A. Best $23,316,856.56; Worst ($19,185,006.11)

B. Best $31,379,852.46; Worst ($13,787,463.40)

C. Best $23,316,856.56; Worst ($13,787,463.40)

D. Best $34,527,280.98; Worst ($13,433,120.34)