Prepare a special-purpose budget for the glory kids center

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Reference no: EM133492749

Question 1: Prepare a special-purpose budget for the Glory Kids' Center. Do not include the incremental lift ticket revenue from the expected increase in the volume of skier days in your estimate.

After completing these analyses, Dan Finn asks you to update the budget to include the impact of installing the wind turbine, replacing the snowmaking equipment and operating the Glory Kids' Center. In addition, Glory will have to issue a $6,000,000 bond to finance the acquisition of the equipment. The coupon rate on the bond will be 5 percent. It will require Glory to pay interest every 6 months and to repay the full $6 million of principal in 20 years. The bonds will be issued on the first day of Glory's fiscal year, and all equipment will be put in service that same day.

Question 2: Using the base budget from Question 1 as a starting point, prepare a revised budget for Glory that incorporates all of these initiatives.

At the end of the season, bad weather caused the mountain to be open for only 115 days with an average of 2,600 people per day and an average price per lift ticket of $50.50.

Reference no: EM133492749

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