Find what is the annual ocf for the project

Assignment Help Finance Basics

Reference no: EM131997127

Question: McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $761 per set and have a variable cost of $397 per set. The company has spent $17581 for a marketing study that determined the company will sell 5278 sets per year for seven years. The marketing study also determined that the company will lose sales of 925 sets of its high-priced clubs. The high-priced clubs sell at $1031 and have variable costs of $724. The company will also increase sales of its cheap clubs by 1169 sets. The cheap clubs sell for $439 and have variable costs of $243 per set. The fixed costs each year will be $904644. The company has also spent $118666 on research and development for the new clubs. The plant and equipment required will cost $2869304 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $129139 that will be returned at the end of the project. The tax rate is 31 percent, and the cost of capital is 11 percent. What is the annual OCF for this project?

Reference no: EM131997127

Questions Cloud

What would you pay for the stock today : McGonigal's Meats, Inc. currently pays no dividends. The firm plans to begin paying dividends in 3 years. The first dividend will be $1.50.

State legislature wield the greater power : In the state of California does the governor or state legislature wield the greater power? What are the political roles each of them play in the state

Implement to discourage radical movements : What specific foreign policy changes should the United States and the West as a whole implement to discourage radical movements and terrorist organizations?

What are the 4 ts when running for potus : What are the 4 Ts (like Time and Theme) when running for POTUS (President of the United States)?

Find what is the annual ocf for the project : McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $761 per set and have a variable cost of $397 per set. The company has spent.

Write a one-page position in favor of the policy : Write a one-page position against the policy. Write a one-page response to the argument in favor of the policy.

What will the marginal cost of capital be : What will the marginal cost of capital be immediately after that point? (Consider the facts in both parts c and d.) (Do not round intermediate calculations).

Calculate the quantity and price variances : Budgeting Problem - Calculate the Quantity and Price Variances for each budget and indicate whether each is favorable or unfavorable

How do reporters evaluate the credibility of the people : Based on the evaluation criteria described in your reading, consider each of the following scenarios and the sources provided.

User Account

All Pages