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The Tempo Golf and Country Club in London, Ontario, is evaluating two different irrigation system options....
The Tempo Golf and Country Club in London, Ontario, is evaluating two different irrigation system options. An underground automatic irrigation system will cost $9.2 million to install and $80,500 pre-tax annually to operate. It will not have to be replaced for 20 years. An aboveground system will cost $6.8 million to install, but $195,000 per year to operate. The aboveground equipment has an effective operating life of nine years. The country club leases its land from the city and both systems are considered leasehold improvements; as a result, straight-line capital cost allowance is used throughout, and neither system has any salvage value. The tax rate is 39%. Calculate the equivalent annual cost for each method if we use a 13% discount rate? (Enter the answers in dollars. Do not round your intermediate calculations. Round the final answers to 2 decimal places. Negative answers should be indicated by a minus sign. Omit $ sign in your response.)
Solutions
jeff jeffy answered 1 year agoRelated Solutions
The Tempo Golf and Country Club in London, Ontario, is evaluating two different irrigation system options....
The Tempo Golf and Country Club in London, Ontario, is
evaluating two different irrigation system options. An underground
automatic irrigation system will cost $9.2 million to install and
$82,000 pre-tax annually to operate. It will not have to be
replaced for 20 years. An aboveground system will cost $6.8 million
to install, but $210,000 per year to operate. The aboveground
equipment has an effective operating life of nine years. The
country club leases its land from the city and both...
The Tempo Golf and Country Club in London, Ontario, is evaluating two different irrigation system options....
The Tempo Golf and Country Club in London, Ontario, is
evaluating two different irrigation system options. An underground
automatic irrigation system will cost $9.2 million to install and
$81,200 pre-tax annually to operate. It will not have to be
replaced for 20 years. An aboveground system will cost $6.8 million
to install, but $202,000 per year to operate. The aboveground
equipment has an effective operating life of nine years. The
country club leases its land from the city and both...
McGilla Golf is evaluating a new golf club. The clubs will sell for $930 per set...
McGilla Golf is evaluating a new golf club. The clubs will sell
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company has spent $140,000 for a marketing study that determined
the company will sell 47,000 sets per year for seven years. The
marketing study also determined that the company will lose sales of
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McGilla Golf is evaluating a new golf club. The clubs will sell
for $875 per set and have a variable cost of $430 per set. The
company has spent $150,000 for a marketing study that determined
the company will sell 60,000 sets per year for seven years. The
marketing study also determined that the company will lose sales of
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McGilla Golf is evaluating a new golf club. The clubs will sell
for $1,000 per set and have a variable cost of $450 per set. The
company has spent $157,500 for a marketing study that determined
the company will sell 50,500 sets per year for seven years. The
marketing study also determined that the company will lose sales of
9,500 sets of its high-priced clubs. The high-priced clubs sell at
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McGilla Golf is
evaluating a new golf club. The clubs will sell for $750 per set
and have a variable cost of $350 per set. The company has spent
$145,000 for a marketing study that determined the company will
sell 57,000 sets per year for seven years. The marketing study also
determined that the company will lose sales of 9,000 sets of its
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Business Decision Case The Reserve Club is a traditional private golf and country club that has...
Business Decision Case
The Reserve Club is a traditional private golf and country club
that has three different categories of memberships: golf, tennis
& swimming, and social. Golf members have access to all
amenities and programs in the Club, Tennis & Swimming members
have access to all amenities and programs except use of the golf
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OU Country Club is estimated yearly demand schedule for each customer’s in the golf club is...
OU Country Club is estimated yearly demand schedule for each
customer’s in the golf club is P = 100-2Q with a constant marginal
cost of 20 per customer per play and a yearly fixed cost of
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strategy, where F is the country club membership and r is a usage
charge per customer. (10 points)
a) What is the optimal F and...
You are evaluating a project for The Farpour golf club, guaranteed to correct that nasty slice....
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price of The Tiff-any to be $400 per unit and sales volume to be
1000 units in year 1; 1500 units in year 2; and 1325 units in year
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Aliya works for an irrigation district that is considering two options for building new infrastructure to...
Aliya works for an irrigation district that is considering two
options for building new infrastructure to expand irrigation. The
infrastructure won’t be built for 3 years (so, capital costs will
be incurred in 2023). Option A is estimated to cost $5 million in
2020 dollars. It is anticipated that Option A infrastructure could
be used for 5 years, then sold for $1 million (in 2028 dollars;
this estimate does not need to be adjusted). Estimated additional
revenues are $4.2 million...
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