Question:Problem 12-5A a-c, d1 (Part Level Submission)
(Video)
Coolplay Corp. is thinking about opening a soccer...
Question
Problem 12-5A a-c, d1 (Part Level Submission)
(Video)
Coolplay Corp. is thinking about opening a soccer...
Problem 12-5A a-c, d1 (Part Level Submission)
(Video)
Coolplay Corp. is thinking about opening a soccer camp in southern
California. To start the camp, Coolplay would need to purchase land
and build four soccer fields and a sleeping and dining facility to
house 150 soccer players. Each year, the camp would be run for 8
sessions of 1 week each. The company would hire college soccer
players as coaches. The camp attendees would be male and female
soccer players ages 12–18. Property values in southern California
have enjoyed a steady increase in value. It is expected that after
using the facility for 20 years, Coolplay can sell the property for
more than it was originally purchased for. The following amounts
have been estimated.
Cost of land
$331,800
Cost to build soccer fields, dorm and dining facility
$663,600
Annual cash inflows assuming 150 players and 8 weeks
$1,017,520
Annual cash outflows
$929,040
Estimated useful life
20 years
Salvage value
$1,659,000
Discount rate
8%
Click here to view PV table.
(a)
Your answer is partially correct. Try again.
Calculate the net present value of the project. (If the
net present value is negative, use either a negative sign preceding
the number e.g. -45 or parentheses e.g. (45). Round answer to 0
decimal places, e.g. 125.For calculation
purposes, use 5 decimal places as displayed in the factor table
provided.)