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Bobby Jones, the club pro at Pebble Beach Golf Club, is considering replacing his fleet of golf carts. He bought the existing fleet of 100
Bobby Jones, the club pro at Pebble Beach Golf Club, is considering replacing his fleet of golf carts. He bought the existing fleet of 100 Ez-GO carts two years ago for $2,000 per cart. He is considering replacing them with a new model Club Car. Each Club Car has GPS, a cooler, and a balt/club cleaner and costs $3,000. The golf carts are 5 -vear property with depreciation rates of 20%,32%,19.2%, and 11.52% in the first four years. If Jones replaces the carts, then he expects to attract more golfers because golfers prefer courses where the carts have GPS. Jones expects 100 extra foursomes per vear and each foursome generates $800 in revenues. Jones expects to have to hire one additional staff member to service the additional golfers at an annual cost of $26,000. If Mr. Jones goes ahead with the golf cart replacement, he expects to keep the new carts for three years. What are the annual operating cash flows in the second year after replacement? Assume a tax rate of 35%. (Round your answer to the nearest dollar.) You can check your answer 2 more times before the question is locked
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