User Account

All Pages

Bussiness.., Managerial Accounting

Assignment Help:
#queThe following information pertains to Fairways Driving Range, Inc.:

The company is considering operating a new driving range facility in Sanford, FL. In order to do so, they will need to purchase a ball dispensing machine, a ball pick-up vehicle and a tractor and accessories for a total cost of $70,000. All of this depreciable equipment will be 7-year MACRS property. The project is expected to operate for 6 years, at the end of which the equipment will be sold for 40% of its original cost. Fairways expects to have $40,000 of fixed costs each year other than depreciation. These fixed costs include the cost of leasing the land for the driving range.

Fairways expects to have sales for the first year of $80,000 based on renting 20,000 buckets of balls @ $4 per bucket. For years 2-6, they expect the number of buckets rented to steadily increase by 750 buckets per year, while the price will remain constant @ $4. Expenditures needed for buckets and balls each year are expected to be 15% of the gross revenues for the year.

The project would have an initial working capital requirement of $5,000 and this requirement will be 10% of all revenues after that. Fairways will be in the 15% tax bracket for all years in question. The company’s required rate of return for this project is 20%.

Please complete the following tables to determine the NPV for Fairways Driving Range, Inc.’s proposed Sanford venture. PLEASE ROUND ALL FIGURES TO THE NEAREST WHOLE DOLLAR!
stion..

Related Discussions:- Bussiness..

Orders per year , Lila Battle has determined that the annual demand for num...

Lila Battle has determined that the annual demand for number 6 screws is 100,000 screws. Lila, who works in her brother's hardware shop, is in charge of purchasing. She estimates t

What are the elements of cost, Elements of cost: 1. Material: the sub...

Elements of cost: 1. Material: the substance from which the product is made is known as material it may be in a raw or a manufactured state. It can be direct as well as indir

Flexible budgeting, FLEXIBLE BUDGETING Flexible budget may be used in one ...

FLEXIBLE BUDGETING Flexible budget may be used in one of two ways: Planning and Control. At the planning stage when budgets are set, to reduce the effect of uncertainty. For ex

Carrying costs of inventory-relevant costs of eoq model, Carrying costs of ...

Carrying costs of inventory These are costs incurred because the firm has decided to maintain inventories. They generally consist of: •    Stock-out costs •    Insurance co

Multiple products, differentiate between multiple product, selling product ...

differentiate between multiple product, selling product and margin managent

Irrelevant costs, Characteristics of irrelevant costs

Characteristics of irrelevant costs

Production during the period, Coolidge Company estimates that its productio...

Coolidge Company estimates that its production workers will work 125,000 direct labor hours during the upcoming period and that overhead costs will amount to $500,000. What predete

Impact of Cost Structure., You are required to provide a report of approx 5...

You are required to provide a report of approx 500 words or less (excluding attachments and references), accompanied by relevant calculations, in MS Word, MS Excel and/or PDF forma

Explain prerequisites of a sound variances analysis system, Prerequisites o...

Prerequisites of a sound variances analysis system A variance analysis system would be good enough in controlling costs and evaluation performances if the following requirement

The value chain and cost analysis, The Value Chain and Cost Analysis The ...

The Value Chain and Cost Analysis The behavior of a firm's costs and its relative cost position stem from the value activities the firm performs in competing in an industry. A me

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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