QUESTION

92. Outdoor Sports is considering adding a miniature golf course to its facility. The course would cost $138,000, would

Category: Business
Subject: Finance
Due Date: 02/03/2016
Question Asked: 2016-02-03 03:17:40

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92. Outdoor Sports is considering adding a miniature golf course to its facility. The course would cost $138,000, 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 $72,000 a year with $24,000 of that amount being variable cost. The fixed cost would be $11,600. In addition, the firm anticipates an additional $14,000 in revenue from its existing facilities if the golf course is added. 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 34 percent? 
A. $11,309
B. $11,628
C. $12,737
D. $14,439
E. $14,901


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92. Outdoor Sports is considering adding a miniature golf course to its facility. The course would cost $138,000, would

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Posted on 2016-02-03 03:17:40

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...ng fees would be $72,000 a year with $24,000 of that amount being variable cost. The fixed cost would be $11,600. In addition, the firm anticipates an add...

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