very successful health and recreation club wants to construct mock mountain for Climbing and exercise outside for its customers use. Because of its ocation, there is a 35% chance of a 120-day season of good outdoor weather, a 45% chance of a 150-day season, and a 20% chance of a 165-day season. he mountain will be used by an estimated 325 persons each day of the 4-month (120-day) season, but by only 100 per day for each extra day the season sts. The feature will cost $435,000 to construct and require a $20,000 rework every 4 years, and the annual maintenance and insurance costs will be 54,000. The climbing fee will be $4 per person. If a life of 12 years is anticipated and a 10% return is expected,what is the NPV of this project?
very successful health and recreation club wants to construct mock mountain for Climbing and exercise outside for its customers use. Because of its ocation, there is a 35% chance of a 120-day season of good outdoor weather, a 45% chance of a 150-day season, and a 20% chance of a 165-day season. he mountain will be used by an estimated 325 persons each day of the 4-month (120-day) season, but by only 100 per day for each extra day the season sts. The feature will cost $435,000 to construct and require a $20,000 rework every 4 years, and the annual maintenance and insurance costs will be 54,000. The climbing fee will be $4 per person. If a life of 12 years is anticipated and a 10% return is expected,what is the NPV of this project?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 2TP: Austins cell phone manufacturer wants to upgrade their product mix to encompass an exciting new...
Related questions
Question
100%
Answer Options:
$291,957
$357,210
$433,900
$616,260
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning