Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A very successful heath and recreation club wants to construct a mock mountain for climbing and exercise outside for its customers' use. Because of its
A very successful heath and recreation club wants to construct a mock mountain for climbing and exercise outside for its customers' use. Because of its location, there is a 30% chance of the 120-day season of good outdoor weather, a 50% chance of a 150-day season, and a 20% chance of a 165-day season. The mountain will be used by an estimated 350 persons each day of the 4-month (120-day) season, but by only 100 per day of each extra day the season lasts. The feature will cost $375,000 to construct and require a $25,000 rework every 4 years and the annual maintenance and insurance costs will be $56,000. The climbing fee will be $5 per person. If a life of 10 years is anticipated and a 10% return is expected determine the NPV of the project $616,260 $215,300 $433,900 $357,210
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started