Straightforward net-present-value and payback computations

Assignment Help Financial Accounting
Reference no: EM13343739

Straightforward net-present-value and payback computations

STL Entertainment is considering the acquisition of a sight-seeing boat for summer tours along the Mississippi River. The following information is available:

Cost of boat

$500,000

Service life

10 summer seasons

Disposal value at the end of 10 seasons

$100,000

Capacity per trip

300 passengers

Fixed operating costs per season (including straight-line depreciation)

$160,000

Variable operating costs per trip

$1,000

Ticket price

$5 per passenger

All operating costs, except depreciation, require cash outlays. On the basis of similar operations in other parts of the country, management anticipates that each trip will be sold out and that 120,000 passengers will be carried each season. Ignore income taxes.

Instructions:

By using the net-present-value method, determine whether STL Entertainment should acquire the boat. Assume a 14% desired return on all investments,- round calculations to the nearest dollar.

Reference no: EM13343739

Questions Cloud

Define molar concentration of the hydrochloric acid solution : The endpoint in the titration is "overshot" A. is the reported molar concentration of the hydrochloric acid solution too high or too low. B. As a result of this poor titration technique, is the reported number of moles of B4O5(OH)4^2 would be too ..
Calculate the resistance of the heater : A 120-V fish tank heater has a power rating of 112 W. Calculate the resistance of the heater and Calculate the current through the heater
Asthe company sproduct manager : Asthe company'sproduct manager, your boss (the marketing manager) is concerned about the future success or viability of the product line you oversee. She wants to make sure thatyou understand thereasons that could cause a popular product to become an..
What is the net work done on the rocket in kil : A 1000-kg rocket has a net propulsion force of 80 kN (kiloNewtons). Over a short time period, it uniformly speeds up from an initial velocity of 35 m/s to a final velocity of 60 m/s. What is the net work done on the rocket in kil
Straightforward net-present-value and payback computations : Determine whether STL Entertainment should acquire the boat. Assume a 14% desired return on all investments,- round calculations to the nearest dollar.
Define how no can be produced when 25.0 g of oxygen reacts : Consider the reaction N2 (g) + O2 (g) ? 2 NO (g).a. How many g NO can be produced when 25.0 g of nitrogen reacts? b. How many g NO can be produced when 25.0 g of oxygen reacts? c. Based on your answers in a and b,
What were peet diluted earnings per share in 2008 : Find online the annual 10-K report for Peet’s Coffee and Tea (PEET) for 2008. Answer the following questions from the income statement:
Approximately how many neutrons would fit inside the ball : Suppose you could pack neutrons (mass = 1.67 × 10-27 kg) inside a small ball of radius 0.033 m in the same way as neutrons and protons are packed together in the nucleus of an atom. Approximately how many neutrons would fit inside the ball
Change and stress management at hia : Change and stress management at HIA

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd