The Legacy Of Lincoln Sports Equipment

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Lincoln Sports Equipment is a family owned business based in Springdale, Illinois and has annual sales of 20 million. The firm manufactures a broad range of sporting equipment. Recently, avid baseball enthusiast and Lincoln Sports CEO, Brian Fitzpatrick, expanding on an industry trend developed a new cleat. The proposed new cleat would place two circular ridges of plastic cleats around the soles of the shoe. Lincoln sports experienced mixed feedback in a limited trial. One major flaw the trial testing uncovered was that under pressure the spikes had a tendency to suddenly snap off. Management is confident that by spending the first year perfecting and market testing the new cleat that there is a 75% chance that they will receive positive…show more content…
The additional Scenario analysis that was conducted was Pessimistic, Best Guess, and Optimistic. These scenarios are based on sales price, probability of success/failure, cost of capital/discount rate, unit sales for the old cleat, COGS for full production, limited production and existing production, while keeping all other variables constant. For further detail look at the assumptions and conclusion section Lincoln sports case is faced with a major company altering decision. Through relying on expected net present value of the new cleat production and scenario analysis, the company would determine whether or not taking on the new cleat production would benefit the company. Introduction Lincoln Sports Equipment is a family-owned business based in Springdale, Illinois. The company manufactures a variety of sports equipment, however, the company is best known for its batting glove that is made of spandex and English leather. With annual sales of over $20 million, the Lincoln Spots is contemplating whether to invest in a new baseball cleats, but the project is very risky. Sam Leadfor, who is the president and largest stockholder of Lincoln Sports said, “This could be about the riskiest

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