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pearfox635Lv1
28 Sep 2019
SQLite Sports is considering adding a miniature golf course to its facility. The course would cost $136,924, would be depreciated on a straight line basis over its 5-year life, and would have a zero salvage value. The estimated income from the golfing fees would be $74,894 a year with $26,722 of that amount being variable cost. The fixed cost would be $11,483. In addition, the firm anticipates an additional $14,982 in revenue from its existing facilities if the golf course is added. The project will require $3,836 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 11.3 percent and a tax rate of 34 percent?
SQLite Sports is considering adding a miniature golf course to its facility. The course would cost $136,924, would be depreciated on a straight line basis over its 5-year life, and would have a zero salvage value. The estimated income from the golfing fees would be $74,894 a year with $26,722 of that amount being variable cost. The fixed cost would be $11,483. In addition, the firm anticipates an additional $14,982 in revenue from its existing facilities if the golf course is added. The project will require $3,836 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 11.3 percent and a tax rate of 34 percent?
Irving HeathcoteLv2
28 Sep 2019
