QUESTION
95. The Golf Range is considering adding an additional driving range to its facility. The range would cost $76,000, woul
Category: Business
Subject: Finance
Due Date: 02/03/2016
Question Asked: 2016-02-03 03:19:32
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User: LightspeedLearning
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95. The Golf Range is considering adding an
additional driving range to its facility. The range would cost $76,000, would
be depreciated on a straight line basis over its 7-year life, and would have a
zero salvage value. The anticipated income from the project is $34,000 a year
with $14,400 of that amount being variable cost. The fixed cost would be
$16,200. The firm believes that it will earn an additional $13,000 a year from
its current operations should the driving range be added. The project will
require $2,000 of net working capital, which is recoverable at the end of the
project. What is the internal rate of return on this project at a tax rate of
34 percent?
A. 7.53 percent
B. 9.29 percent
C. 11.47 percent
D. 12.68 percent
E. 14.04 percent
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95. The Golf Range is considering adding an additional driving range to its facility. The range would cost $76,000, woul
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Posted on 2016-02-03 03:19:32
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...basis over its 7-year life, and would have a zero salvage value. The anticipated income from the project is $34,000 a year with $14,400 of that amount be...
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