A car company has decided to spend $150M on a museum for exhibiting its classic cars. Land
Question:
A car company has decided to spend $150M on a museum for exhibiting its classic cars. Land can be purchased for $500,000. The museum building will require 30,000 square feet of general space while each car displayed will require an additional 1000 square feet. The design and planning process will cost $100,000, which should be paid immediately. The construction of the building will cost $600 per square foot, and the building will be completed within the next 2 years, while the cost of construction will be distributed evenly between the 2 years of construction. All cars will be purchased during the second year of construction at an average cost of $120,000 per car. The annual operation of the museum will cost $2,000,000 plus $30,000 per car If the funds are invested at 9% museum is to exist forever, how many cars can the trustees purchase?
Fundamental Managerial Accounting Concepts
ISBN: 978-0078025655
7th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor-Yi Tsay, Philip Old