Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume the discount rate for both projects is 11 percent. Project A: Project B: Nagano NP-30. Professional clubs that will take an initial investment of $930,000 at Time 0. Introduction of new product at Year 6 will terminate further cash flows from this project. Nagano NX-20. High-end amateur clubs that will take an initial investment of $673,000 at Time O. Introduction of new product at Year 6 will terminate further cash flows from this project. Year NP-30 NX-20 O12345 0 -$930,000-$673,000 341,000 264,000 331,000 272,000 306,000 254,000 299,000 234,000 209,000 182,000 Complete the following table: (Do not round intermediate calculations. Enter the IRR as a percent. Round your profitability index (PI) answers to 3 decimal places, e.g., 32.161, and other answers to 2 decimal places, e.g., 32.16.) NPV IRR ΡΙ NP-30 % NX-20 %

Consider two mutually exclusive new product launch projects that Nagano Golf is considering. Assume the discount rate for both projects is 11 percent. Project A: Project B: Nagano NP-30. Professional clubs that will take an initial investment of $930,000 at Time 0. Introduction of new product at Year 6 will terminate further cash flows from this project. Nagano NX-20. High-end amateur clubs that will take an initial investment of $673,000 at Time O. Introduction of new product at Year 6 will terminate further cash flows from this project. Year NP-30 NX-20 O12345 0 -$930,000-$673,000 341,000 264,000 331,000 272,000 306,000 254,000 299,000 234,000 209,000 182,000 Complete the following table: (Do not round intermediate calculations. Enter the IRR as a percent. Round your profitability index (PI) answers to 3 decimal places, e.g., 32.161, and other answers to 2 decimal places, e.g., 32.16.) NPV IRR ΡΙ NP-30 % NX-20 %

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section10.A: Mutually Exclusive Investments Having Unequal Lives

Problem 1P

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