You are considering developing an 18-hole championship golf course thatrequires an investment of $20,000,000. This investment cost includes the course development, club house, and golf carts. Once constructed, you expect the maintenance cost for the golf course to be $650,000 in the first year, $700,000 in the second year and continue to increase by $50,000 in subsequent years. The net revenue generated from selling food and beverage will be about 15% of greens fees paid by the players. The cart fee per player is $15, and 40,000 rounds of golf are expected per year. You will own and operate the course complex for 10 years and expect to sell it for $25,000,000. What is the greens fee per round that will provide a return on investment of 15%'? Assume that the green fee will be increased at an annual rate of 5%.
You are considering developing an 18-hole championship golf course that
requires an investment of $20,000,000. This investment cost includes the course development, club house, and golf carts. Once constructed, you expect the maintenance cost for the golf course to be $650,000 in the first year, $700,000 in the second year and continue to increase by $50,000 in subsequent years. The net revenue generated from selling food and beverage will be about 15% of greens fees paid by the players. The cart fee per player is $15, and 40,000 rounds of golf are expected per year. You will own and operate the course complex for 10 years and expect to sell it for $25,000,000. What is the greens fee per round that will provide a
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