Answered step by step
Verified Expert Solution
Question
1 Approved Answer
i need an answer and explanation to my finance problem. Over the past sx months, Six Flaps conducted a marketing study on improving their park
i need an answer and explanation to my finance problem.
Over the past sx months, Six Flaps conducted a marketing study on improving their park experience. The study cost $3.00 millon and the results sugposted that Sox Flags add a Wid's only roller coaster. Suppose that Six Flags decides to build a new roller cosster for the upcoming cperating season. The depreciable equigment for the roller coaster will cost \$50.00 milion and an additional $5.00 milion to install, The equipment will be depreciated stright-fine over 20 yearn. The markoting team at Six Flags expects the coaster to increase attendance at the park by 5%. This trantiates to 101,535,00 more vistors at an amerage ticket price of 540.00 . Experses foc these visitors are about 18.00% of sales. There is no impact on wocking copital. The average vistor spends $25.00 on park merchandise and concessions. The aftemtax operating morgin on these side effects is 29.00%. The tox rate facing the firm is 34.00%, while the cost of capial is 7.00%. What is the NPV of this coaster project if 5x Fags wat evaluste it over a 20 -year period? (Sx Flogs expects the fint year projoct cash flow to grow at 5% per year, going forward) (Express antwer in milions) Answer Format: Currency: Pound to: 2 decimal places Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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