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You are the senior management accountant in the head office of Zap Fitness, a large fitness group. You report to the financial controller, Annie Dobrosi Zap Fitness currently owns and runs 25 gyms throughout Australia. Annie informs you that the marketing department would ke to add a climbing wall to the facilities in each of its gyms, all of which have sufficient room to build this additional facility. Based on a prototype created within one of the Melbourne gyms, the marketing department has provided the following estimates for your use in analysing discounted cash flow, payback and discounted payback periods. All price and cost estimates are exclusive of GST See image & Calculate Net Present Value of thr climbing wall of this Zap Fitness gym. 2 Calculate payback period.

You are the senior management accountant in the head office of Zap Fitness, a large fitness group. You report to the financial controller, Annie Dobrosi Zap Fitness currently owns and runs 25 gyms throughout Australia. Annie informs you that the marketing department would ke to add a climbing wall to the facilities in each of its gyms, all of which have sufficient room to build this additional facility. Based on a prototype created within one of the Melbourne gyms, the marketing department has provided the following estimates for your use in analysing discounted cash flow, payback and discounted payback periods. All price and cost estimates are exclusive of GST See image & Calculate Net Present Value of thr climbing wall of this Zap Fitness gym. 2 Calculate payback period.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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You are the senior management accountant in the head office of Zap Fitness, a large fitness group. You report to the financial controller, Annie Dobrosi Zap Fitness currently owns and runs 25 gyms throughout Australia. Annie informs you that the marketing department would ke to add a climbing wall to the facilities in each of its gyms, all of which have sufficient room to build this additional facility. Based on a prototype created within one of the Melbourne gyms, the marketing department has provided the following estimates for your use in analysing discounted cash flow, payback and discounted payback periods. All price and cost estimates are exclusive of GST

See image & Calculate Net Present Value of thr climbing wall of this Zap Fitness gym.

2 Calculate payback period.

paamsue /T $200,000 $105,250 Constructionset-up costs 10% of construction co Additional staff costs per annum 75 Equipment maintenance per annum Additional annual memberships $1,250 Awerage annual membership fee 25 Number of members who would have left on expiry of membership, but are now remaining with the gym on an ongoing basis' because of the Installation of the climbing wall Additional annual casual visits 75 per week Casual visit charge $15 Cll WACC 14% Equipment life Expected life of walls and equipment is five years Taxation TightFitt has substantial carried forward tax losses and is not expected to pay income tax for 10 years Tax rate 30% 回器
Transcribed Image Text:paamsue /T $200,000 $105,250 Constructionset-up costs 10% of construction co Additional staff costs per annum 75 Equipment maintenance per annum Additional annual memberships $1,250 Awerage annual membership fee 25 Number of members who would have left on expiry of membership, but are now remaining with the gym on an ongoing basis' because of the Installation of the climbing wall Additional annual casual visits 75 per week Casual visit charge $15 Cll WACC 14% Equipment life Expected life of walls and equipment is five years Taxation TightFitt has substantial carried forward tax losses and is not expected to pay income tax for 10 years Tax rate 30% 回器
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