Explain the term capital budgeting

Reference no: EM1313288

Explain the term Capital budgeting

Ettenheim Village is considering building a town swimming pool. The annual facility cost would be $200,000. Staff salaries for the pool, which would be open only during the summer, would be $75,000. Other fixed costs would be $20,000 per year. There are other expenses of $50 per person per season.

Marketing studies suggest that village residents would be willing to pay $150 per person per year for an individual membership and $300 for a family membership. On average, families in the village have three people. How many members will have to join each year to make the pool cover its costs? Assume that 75 percent of the memberships are family memberships.

Reference no: EM1313288

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