Kaleo has made up his mind-he wants a pool in the family's backyard! He figures his kids and spouse will be thrilled. However, to cover the cost of the pool, they'll have to pack up and live away from home for a few weeks during the summer to rent their home to vacationers. He crunched the numbers based on the following estimates. Kaleo's daughter, Sarah, found the above information written on a sheet of paper in his office, along with the following notes. "This is a no-brainer! We'll recover the cost of this pool in just 7 years, even though we plan to live here until we're old and gray, or at least as long as the pool hangs on. If we can rent our house out for just 3 weeks each year, it'll be almost pure profit that we can put toward paying off the pool. I studied time value of money a little bit in college; the present value of this investment is positive, so therefore we should definitely move ahead with it. My family will think they're in heaven." To generate even more benefit from the pool, Kaleo is considering a full one-month ( 4 weeks) rental for the family's home. He realizes there are pros and cons to this scenario but figures it would be worth it to have one more option to discuss when he brings this up with his family. Under this scenayio, the NPV =$15,990.34. Discuss the pros and cons to this scenario. Discuss the pros and cons to this scenario. Kaleo has made up his mind-he wants a pool in the family's backyard! He figures his kids and spouse will be thrilled. However, to cover the cost of the pool, they'll have to pack up and live away from home for a few weeks during the summer to rent their home to vacationers. He crunched the numbers based on the following estimates. Kaleo's daughter, Sarah, found the above information written on a sheet of paper in his office, along with the following notes. "This is a no-brainer! We'll recover the cost of this pool in just 7 years, even though we plan to live here until we're old and gray, or at least as long as the pool hangs on. If we can rent our house out for just 3 weeks each year, it'll be almost pure profit that we can put toward paying off the pool. I studied time value of money a little bit in college; the present value of this investment is positive, so therefore we should definitely move ahead with it. My family will think they're in heaven." To generate even more benefit from the pool, Kaleo is considering a full one-month ( 4 weeks) rental for the family's home. He realizes there are pros and cons to this scenario but figures it would be worth it to have one more option to discuss when he brings this up with his family. Under this scenayio, the NPV =$15,990.34. Discuss the pros and cons to this scenario. Discuss the pros and cons to this scenario
