To Join or Not toJoin?

AVirginia-based entrepreneur believes that joining Kinloch Golf Club will allow for profitable networkingopportunities, thus improving her business. But she wonders if it is worth the costs of joining. If shejoins, she thinks that hercompany's free cash flow to equity will increase11% a year for 20years, when she plans to retire and dissolve the business. If she does notjoin, she thinks that free cash flow will only increase5% per year for 20 years. Assume the initiation fee at Kinloch is$150,000, with annual dues of$15,000 (due at the end of eachyear). The entrepreneur had free cash flow of$50,000 last year(year 0), and the appropriate discount rate is15%. Ignore any utility she receives from the enjoyment ofgolfing, the terminal value of herbusiness, taxes, and assume the Kinloch membership isnon-equity (no residualvalue). From a pure economicstandpoint, is this a good investment for herbusiness?

Select True if she shouldjoin, and False if she should not.