Find the Present Worth of each of the option Investment: $10 million Annual Revenue: $103 million Breakdown: a) Ticket sales: $68 million b) VIP Memberships: $13 million Concession revenues: $22 million Annual Costs: $75 million Breakdown: a) Maintenance: $35 million b) Salaries: $8 million c) Concession costs: $6 million d) Event Operations: $10 million e) Overhead: $16 million Major Maintenance Update ev
Find the Present Worth of each of the option
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Investment: $10 million
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Annual Revenue: $103 million Breakdown:
a) Ticket sales: $68 million
b) VIP Memberships: $13 million -
Concession revenues: $22 million
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Annual Costs: $75 million Breakdown:
a) Maintenance: $35 million
b) Salaries: $8 million
c) Concession costs: $6 million d) Event Operations: $10 million e) Overhead: $16 million -
Major Maintenance Update every 20 years: $20 million
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- GIVEN ASSUMPTIONS
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While any renovation is taking place, the stadium will be closed and there will be no annual revenue or annual costs
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It is estimated that all Annual Revenues grow at a rate of 1% per year, and all Annual Costs grow at a rate of 0.8% per year
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The MARR is 5%
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The stadium will only be used for 50 years after it is done being upgraded, and at that point it will have
no salvage value.
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