Question
Tom Bat became a baseball enthusiast at a very early age. All of his baseball experience has provided him valuable knowledge of the sport, and
Tom Bat became a baseball enthusiast at a very early age. All of his baseball experience has provided him valuable knowledge of the sport, and he is thinking about going into the batting cage business. He estimates the construction of a state-of-the-art building and the purchase of necessary equipment will cost $840,000. Both the facility and the equipment will be depreciated over 12 years using the straight-line method and are expected to have zero salvage values. His required rate of return is 9% (present value factor of 7.1607). Estimated annual net income and cash flows are as follows:
| Revenue | $350,500 | |||||
| Less: | ||||||
| Utility cost | $40,000 | |||||
| Supplies | $8,000 | |||||
| Labor | 141,000 | |||||
| Depreciation | 70,000 | |||||
| Other | 38,500 | 297,500 | ||||
| Net income | $53,000 | |||||
The net present value. (Round answer to 0 decimal places, e.g. 5,275.)
| Net present value |
The internal rate of return. (use the above table.)
| Internal rate of return |
The cash payback period. (Round answer to 2 decimal places, e.g. 15.25.)
| Cash payback period |
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The Training And Development Audit
Authors: Rosemary Harrison
2nd Edition
0955970725, 978-0955970726
