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Isabelle Abiassi operates a popular summer camp for elementary school children. Projections for the current year are as follows: Sales revenue $7,320,000 Operating income $641,500
Isabelle Abiassi operates a popular summer camp for elementary school children. Projections for the current year are as follows:
The camps weighted-average cost of capital is 11%, and Isabelle requires that all new investments generate a return on investment of at least 15%. The camps current tax rate is 25%. At last weeks advisory board meeting, Isabelle told the board that she had up to $50,000 to invest in new facilities at the camp and asked them to recommend some projects. Today the boards president presented Isabelle with the following list of three potential investments to improve the camp facilities. Playground Swimming Pool Gym Incremental operating income $ 3,795 $ 4,488 $ 2,603 Average total assets 25,300 37,400 13,700 Calculate the economic value added for each projects
Sales revenue | $7,320,000 |
Operating income | $641,500 |
Average assets | $3,664,000 |
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