Question
In the formulation of a new Project I know this studying the possibility of establish an amusement park in the country in the upper sector
In the formulation of a new Project I know this studying the possibility of establish an amusement park in the country in the upper sector of the capital. For determine the interest that could exist on it, a market study was carried out whose results They were the following ones:
For the first year of operation, sales of 2,800 tickets were estimated for the first semester and 3,200 for the second. However, according to the growth of target market, an increase in demand of 100 tickets per year is projected. The target market is made up of 35% of adults and 65% children's.
Both market segments would have a different price structure, which will consist of $35 admission per adult and $25 per child, being able to use all the park attractions as many times as you want. These values will be increased, by a one time, in 25% on the third year.
The technical study has determined that it will be necessary to incur the following costs averages according to studies made a others countries
Energy = 0.25 by person
Maintenance = 2.35 by person
Direct work = 6.40 by person
For that the park of amusements be attractive, shall contain, to the less, a "mountain Russian”, a "House of terror", the “pirates of Caribbean", Y a mini city set to the style old West of century XIX. With the objective of complying with it above, the technical study determined it necessary to make the following investments in active in the dates that are noted:
Active | Acquisition | Value of Acquisition | Life Useful | Value of Rescue |
Land | two years apm | $60,000 | - | 100% |
Games | 8 months ypm | $350,000 | 10 | 60% |
computing | 3 months ypm | $21,000 | 3 | 25% |
apm: Before of the put in March
For the execution of the installations and physical works of the park, an investment of $240,000, the that I know pay to in 24 dues same each month. These investments will be depreciated over 20 years and would have a salvage value of 70% of its worth of billing. The 80% of the investments I know they will finance through a
credit in a recognized commercial bank of the capital. The interest rate of said credit would be from 10% annual on balances.
The investment in working capital is estimated at 2 months of operational cost.
For the functioning of the park will be necessary to count on a structure administrative, which will imply a monthly expense of $3,200.
To the closing of the month previous, the rate of interest that they pay the bonds sovereigns of the United States government was 2%, such interest is considered a free investment of Risk. By another part, in average, during the latest 10 years, the return average SP500 1 composite index had been 8%. On the other hand, the value of systematic risk (market risk) associated with the entertainment industry and theme parks It was 2,500.
By the latest, for make, the evaluation considers a rate of discount of 13% Y a rate 15% tax annual.
Questions :
- which are the estimated income for the next five years? (5pts)
- how much it is investment initially required (including the cost of capital of work)?
- which is the cost of the means own?
- which it is the Cost Weighted of Capital?
- What is the minimum number of inputs required to reach the breakpoint? Balance?
- would you recommend wear finished the investment? justify numerically.
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which are the estimated income for the next five years Sales for the first year of operation are estimated to be 2800 for the first semester and 3200 for the second However according to the growth of ...Get Instant Access to Expert-Tailored Solutions
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