Business, 12.08.2020 08:01 lovelysoul4698

Consider how Clare Valley, a popular ski resort, could use capital budgeting to decide whether the $8 million Stream Park Lodge expansion would be a good investment. Assume that Clare Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $700,000 at the end of its ten-year life. Requirement:
1. Compute the average annual net cash inflow from the expansion.
2. Compute the average annual operating income from the expansion.
3. Compute the payback period.
4. Compute the ARR.
Assume that Clare Valley's managers developed the following estimates concerning a planned expansion to its Blizzard Park Lodge (all numbers assumed):
Number of additional skiers per day $117
Average number of days per year that weather
conditions allow skiing at Clare Valley $164
Useful life of expansion (in years) 9
Average cash spent by each skier per day 243
Average variable cost of serving each skier per day $134
Cost of expansion $8,500,000
Discount rate 12%

Answers: 2

Show answers

Another question on Business

Business, 22.06.2019 02:00

Kenney co. uses process costing to account for the production of canned energy drinks. direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. equivalent units have been calculated to be 19,200 units for materials and 16,000 units for conversion costs. beginning inventory consisted of $11,200 in materials and $6,400 in conversion costs. april costs were $57,600 for materials and $64,000 for conversion costs. ending inventory still in process was 6,400 units (100% complete for materials, 50% for conversion). the total cost per unit using the weighted average method would be closest to:

Answers: 2

Answer

Business, 22.06.2019 03:00

1) u.s. real gdp is substantially higher today than it was 60 years ago. what does this tell us, and what does it not tell us, about the well-being of u.s. residents? what are the limitations of the gdp as a measure of economic well-being? given the limitations, why is gdp usually regarded as the best single measure of a society’s economic well-being? 2) what is an intermediate good? how does an intermediate good differ from a final good? explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of gdp, but the value of intermediate goods produced and not sold is included directly as part of gdp.

Answers: 2

Answer

Business, 22.06.2019 18:00

Biochemical corp. requires $600,000 in financing over the next three years. the firm can borrow the funds for three years at 10.80 percent interest per year. the ceo decides to do a forecast and predicts that if she utilizes short-term financing instead, she will pay 7.50 percent interest in the first year, 12.15 percent interest in the second year, and 8.25 percent interest in the third year. assume interest is paid in full at the end of each year. a)determine the total interest cost under each plan. a) long term fixed rate: b) short term fixed rate: b) which plan is less costly? a) long term fixed rate plan b) short term variable rate plan

Answers: 2

Answer

Business, 22.06.2019 23:30

Sally has a high-paying management position with a fortune 500 company, but she is tired of working for corporate america. so sally has decided to start a business, and she knows she will be successful as an entrepreneur because entrepreneurs typically

Answers: 3

Answer

You know the right answer?

Consider how Clare Valley, a popular ski resort, could use capital budgeting to decide whether the $...

Questions