Question
Please assist.. Kicking It Corp. is planning to open a football camp in Arizona, which will require a land purchase and facilities development that includes
Please assist.. Kicking It Corp. is planning to open a football camp in Arizona, which will require a land purchase and facilities development that includes fields, sleeping and dining facilities, maintenance equipment and other capital expenditures. Each year, the camp will run for eight one-week sessions. The company will also incur operational expenses. The estimates in the following table have been shared with company leadership and investors: Estimated Figures
Land $300,000
Facilities $600,000
Annual Cash Flow (150 total yearly players' fees) $920,000
Annual Cash Outflows $840,000
Estimated Useful Life of Facilities 20 years
Facilities Salvage Value $1,500,000
Discount Rate 8%
A. Recalculate the new net present value (NPV) and payback period using the following data: 125 players attend the camp. 10% discount rate. Annual Cash flow projection - $805,000. Annual Cash Outflow projection - $750,000.
B. Create a NPV Comparison Graph: Create a graph to compare the NPV from part Part 1-1 to the recalculation in part A of this worksheet.
C. Interpret the Sensitivity Analysis: Consider the scenario and your calculations to interpret what the sensitivity analysis reveals by considering the variability among the different discount rates and potential returns.
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