Question

In: Finance

Valley Club is considering adding a miniature golf course to its facility. The course would cost...

  1. Valley Club is considering adding a miniature golf course to its facility. The course would cost $44,000, would be depreciated on a straight-line basis over its 4-year life, and would have a zero salvage value. The estimated income from the golfing fees would be $33,000 a year with $9,000 of that amount being variable cost. The fixed cost would be $6,200. The project will require $3,000 of net working capital, which is recoverable at the end of the project. What is the net present value of this project at a discount rate of 12 percent and a tax rate of 20 percent?

    $2,152.90

    $8,734.16

    $4,840.58

    $6,412.69

Solutions

Expert Solution

INITIAL INVESTMENT = COCT OF GOLF COURSE + WORKING CAPITAL = 44000 + 3000 = 47000

jeff jeffy answered 6 months ago
Next > < Previous

Related Solutions

Valley Club is considering adding a miniature golf course to its facility. The course would cost...
Valley Club is considering adding a miniature golf course to its facility. The course would cost $44,000, would be depreciated on a straight-line basis over its 4-year life, and would have a zero salvage value. The estimated income from the golfing fees would be $33,000 a year with $9,000 of that amount being variable cost. The fixed cost would be $6,200. The project will require $3,000 of net working capital, which is recoverable at the end of the project. What...
the sunland recreation center is considering adding a miniature golf course to its facility. the course...
the sunland recreation center is considering adding a miniature golf course to its facility. the course would cost $150000, would be depreciated on a straight line basis over its 6 years life, and would have a zero salvage value. the estimated income from the golfing fees would be 95000 a year. variable costs would be 32000 per year and fixed cost would be 25000 per year. since the miniature golf course would attract more customers to the center, the firm...
Marge's Campground is considering adding a miniature golf course to its facility. The course equipment she...
Marge's Campground is considering adding a miniature golf course to its facility. The course equipment she wants would cost $400,000, and would be depreciated on a straight-line basis over 8 years with zero salvage value. However, Marge estimates that the project will be run for 4 years only, and a 4-year time horizon will be used. Further, assume that the company can sell the equipment for $220,000 at the end of year 4. Marge estimates the income from the golf...
Marge's Campground is considering adding a miniature golf course to its facility. The course she wants...
Marge's Campground is considering adding a miniature golf course to its facility. The course she wants would cost $30,000, would be depreciated on a straight line basis over the 4-year life of the course, and would have zero salvage value. Marge estimates the income from the golf fees would be $28,000 a year with $10,000 of that amount being variable cost. The fixed cost would be $5,000. Marge feels that the course would net her, after costs, an additional $10,000...
Outdoor Sports is considering adding a putt putt golf course to its facility. The course would...
Outdoor Sports is considering adding a putt putt golf course to its facility. The course would cost $182,000, would be depreciated on a straight-line basis over its 6-year life, and would have a zero salvage value. The sales would be $87,100 a year, with variable costs of $28,150 and fixed costs of $12,750. In addition, the firm anticipates an additional $21,300 in revenue from its existing facilities if the putt putt course is added. The project will require $3,350 of...
Outdoor Sports is considering adding a putt putt golf course to its facility. The course would...
Outdoor Sports is considering adding a putt putt golf course to its facility. The course would cost $170,000, would be depreciated on a straight-line basis over its 6-year life, and would have a zero salvage value. The sales would be $78,400 a year, with variable costs of $27,550 and fixed costs of $12,150. In addition, the firm anticipates an additional $16,500 in revenue from its existing facilities if the putt putt course is added. The project will require $2,750 of...
Outdoor Sports is considering adding a putt putt golf course to its facility. The course would...
Outdoor Sports is considering adding a putt putt golf course to its facility. The course would cost $171,000, would be depreciated on a straight-line basis over its 4-year life, and would have a zero salvage value. The sales would be $97,400 a year, with variable costs of $27,600 and fixed costs of $12,200. In addition, the firm anticipates an additional $16,900 in revenue from its existing facilities if the putt putt course is added. The project will require $2,800 of...
Outdoor Sports is considering adding a putt putt golf course to its facility. The course would...
Outdoor Sports is considering adding a putt putt golf course to its facility. The course would cost $168,000, would be depreciated on a straight-line basis over its 4-year life, and would have a zero salvage value. The sales would be $90,300 a year, with variable costs of $27,450 and fixed costs of $12,050. In addition, the firm anticipates an additional $15,700 in revenue from its existing facilities if the putt putt course is added. The project will require $2,650 of...
Outdoor Sports is considering adding a putt putt golf course to its facility. The course would...
Outdoor Sports is considering adding a putt putt golf course to its facility. The course would cost $179,000, would be depreciated on a straight-line basis over its 6-year life, and would have a zero salvage value. The sales would be $90,000 a year, with variable costs of $28,000 and fixed costs of $12,600. In addition, the firm anticipates an additional $20,100 in revenue from its existing facilities if the putt putt course is added. The project will require $3,200 of...
Outdoor Sports is considering adding a putt putt golf course to its facility. The course would...
Outdoor Sports is considering adding a putt putt golf course to its facility. The course would cost $167,000, would be depreciated on a straight-line basis over its 6-year life, and would have a zero salvage value. The sales would be $84,000 a year, with variable costs of $27,400 and fixed costs of $12,000. In addition, the firm anticipates an additional $15,300 in revenue from its existing facilities if the putt putt course is added. The project will require $2,600 of...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT