Determine the net present value of this project

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SQLite Sports is considering adding a miniature golf course to its facility.

The course would cost $136,924, 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 $74,894 a year with $26,722 of that amount being variable cost.

The fixed cost would be $11,483. In addition, the firm anticipates an additional $14,982 in revenue from its existing facilities if the golf course is added.

The project will require $3,836 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 11.3 percent and a tax rate of 34 percent?

Reference no: EM131992318

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