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Shroom Lovers is an Eco-tourism business which offers remote hiking experiences during which hikers learn to identify, pick, and prepare edible mushrooms. The company wants
Shroom Lovers is an Eco-tourism business which offers remote hiking experiences during which hikers learn to identify, pick, and prepare edible mushrooms. The company wants to build a cabin at the end of its most popular trail to serve as a remote kitchen and dining room for hikers. The cabin will cost $150,000 to build. Revenues from cabin rentals are expected to be $25,000 in year 1, $35,000 in year 2, and $55,000 in year 3 and all subsequent years. Shroom Lovers uses the payback method to decide whether to proceed with a project. Shroom Lovers would like to recover their capital in 4 years. Using the payback method, should Shroom Lovers proceed with this investment and why? Show all your work
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