ZuoTi.Pro
Question

Outdoor Sports is considering adding a putt putt golf course to its facility. The course would cost $181,000, would be depreciated on a straight-line basis over its 5-year life, and would have a zero salvage value. The sales would be $91,000 a year, with variable costs of $28,100 and fixed costs of $12,700. In addition, the firm anticipates an additional $20,900 in revenue from its existing facilities if the putt putt course is added. The project will require $3,300 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 35 percent? O $68.988 O $33,140 O $29,840 O $19,131 O $31,267

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

YEAR cash flows -$184,300 $58,885 $58,885 $58,885 $58,885 $62,185 calculation [-181000-3300 ] 91000-28100-12700+20900)*0.65)+(181000/5 *0.35 pv @ 12% | discounted cash flows -$184,300.00 $52,575.89 $46,942.76 $41,913.18 $37,422.48 $35,285.44 0 1.0000 0.8929 0.7972 0.7118 0.6355 ((91000-28100-12700 20900)*0.65)+(181000/5*0.35)+33000.5674 2 4 NPV $29,840

0 0
Add a comment
Know the answer?
Add Answer to:
Outdoor Sports is considering adding a putt putt golf course to its facility. The course would...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 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 $187,000, would be depreciated on a straight-line basis over its 5-year life, and would have a zero salvage value. The sales would be $91,500 a year, with variable costs of $28,400 and fixed costs of $13,000. In addition, the firm anticipates an additional $23,300 in revenue from its existing facilities if the putt putt course is added. The project will require $3600 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 $178,000, would be depreciated on a straight-line basis over its 5-year life, and would have a zero salvage value. The sales would be $89,500 a year, with variable costs of $27,950 and fixed costs of $12,550. In addition, the firm anticipates an additional $19,700 in revenue from its existing facilities if the putt putt course is added. The project will require $3,150 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 $185,000, would be depreciated on a straight-line basis over its 6-year life, and would have a zero salvage value. The sales would be $90,500 a year, with variable costs of $28,300 and fixed costs of $12,900. In addition, the firm anticipates an additional $22,500 in revenue from its existing facilities if the putt putt course is added. The project will require $3,500 of...

  • Moving to another question will save this response. Question 13 of 25 Question 13 1 points...

    Moving to another question will save this response. Question 13 of 25 Question 13 1 points Save Answe Outdoor Sports is considering adding a putt putt golf course to its facility. The course would cost $189.000, would be depreciated on a straight line basis over its 6-year life, and would have a zero salvage value. The sales would be $94.500 a year, with variable costs of $28,450 and foxed costs of $13.050. In addition, the firm anticipates an additional $23.700...

  • 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...

  • The New Athletics Company produces a wide variety of outdoor sports equipment. Its newest division, Golf Technology, ma...

    The New Athletics Company produces a wide variety of outdoor sports equipment. Its newest division, Golf Technology, manufactures and sells a single product-AccuDriver, a golf club that uses global positioning satellite technology to improve the accuracy of golfers' shots. The demand for AccuDriver is relatively insensitive to price changes. The following data are available for Golf Technology, which is an investment center for New Athletics: 3: (Click the icon to view the data.) Requirements 1. Compute Golf Technology's ROI if...

  • Mountaintop golf course is planning for the coming season. Investors would like to earn a 12%...

    Mountaintop golf course is planning for the coming season. Investors would like to earn a 12% return on the company's $45,000,000 of assets. The company primarily incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $25,000,000 for the golfing season. About 440,000 golfers are expected each year. Variable costs are about $20 per golfer. Mountaintop golf course is a price-taker and won't be able to charge more than its competitors who charge $112 per...

  • Mountaintop golf course is planning for the coming season. Investors would like to earn a 12%...

    Mountaintop golf course is planning for the coming season. Investors would like to earn a 12% return on the company's $48,000,000 of assets. The company primarily incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $22,000,000 for the golfing season. About 400,000 golfers are expected each year. Variable costs are about $20 per golfer Mountaintop golf course is a price-taker and won't be able to charge more than its competitors who charge $84 per...

  • The Bruin's Den Outdoor Gear is considering a new 7-year project to produce a new tent...

    The Bruin's Den Outdoor Gear is considering a new 7-year project to produce a new tent line. The equipment necessary would cost $1.67 million and be depreciated using straight-line depreciation to a book value of zero. At the end of the project, the equipment can be sold for 10 percent of its initial cost. The company believes that it can sell 27,000 tents per year at a price of $71 and variable costs of $31 per tent. The fixed costs...

  • 5) Lakeside Winery is considering expanding its winemaking operations. The expansion will require new equipment cos...

    5) Lakeside Winery is considering expanding its winemaking operations. The expansion will require new equipment costing $675,000 that would be depreciated on a straight-line basis to zero over the 5-year life of the project. The equipment will have a salvage value of $181,000 at the end of the project. The project requires 551,000 initially for networking capital, which will be recovered at the end of the project. The operating cash flow will be $187.600 a year What is the net...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT