The local ymca is looking to purchase a local business that

Assignment Help Accounting Basics

Reference no: EM13598059

The local YMCA is looking to purchase a local business that relates to other lines of business they currently have, so they feel it would be a good fit for their current operations as the Board of Directors feels there are a lot of synergies and efficiencies that can be gained.

The following is some information as it relates to buying this business

The YMCA is thinking of buying this business on April 1, 2011. The following will occur if that were the case:

1) The YMCA will have to pay $350,000 to buy the business, but is choosing to make monthly payments of $2,500 over 20 years.

2) The business will have up to 50 customers who would pay $600/month to use their services.

3) The YMCA will have to hire three staff and pay them a salary (including benefits) totaling $7500/month

4) Operating Expenses will total approximately $10,000/month (not including the cost of buying the business in line 1 above)

5) The YMCA will incur $50,000 in expenses to renovate the business if they choose to buy it before they open the door. This will delay opening of business 3 months.

6) The YMCA knows that it will have to replace the roof in year 3. They have received 3 quotes where the average cost of the quotes is $40,000

7) Additionally, the YMCA will allocate 1/2 of their current director's salary to this operation to help run the facility. The monthly salary (including benefits) is $4,000

8) The YMCA, being a non-profit, is a very conservative operation and does not require a large return on its investments, so it considers its cost of capital to be 11%

9) The YMCA thinks it might sell the business after 10 years to someone in the community.

10) The YMCA is a non-profit organization, so ignore income taxes.Calculate the net present value of this project

Reference no: EM13598059

Questions Cloud

Bank collected 127890 note for family in july plus interest : the following information pertains to family video company.1. cash balance per bank july 31 10320.72.2. july bank

Carnival corporation has recently placed into service some : carnival corporation has recently placed into service some of the largest cruise ships in the world. one of these ships

What is the planned annual operating income at a selling : what is the planned annual operating income at a selling price of 12 per unit when the total manufactoring costs are 6

Company a has revenues of 3750 net income to common : company a has revenues of 3750 net income to common sharholders of 476 income before interest and related taxes of 476

The local ymca is looking to purchase a local business that : the local ymca is looking to purchase a local business that relates to other lines of business they currently have so

Reck company receives a 10000 3-month 8 promissory note : reck company receives a 10000 3-month 8 promissory note from fey company in settlement of an open accounts receivable.

The problem states that sales increased 20 so multiply the : the problem states that sales increased 20. so multiply the current sales by 20 and add that amount to the current

Lifetime sells softball equipment on november 14 they : lifetime sells softball equipment. on november 14 they shipped 2000 worth of softball uniforms to palos middle school

Which element of the five categories of control activities : checks are mailed by the owner or manager or a person under her supervision after signed. a. which element of the

User Account

All Pages