Athena is thinking about joining the Buena Vista Golf & Social Club to improve her business....

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Athena is thinking about joining the Buena Vista Golf &Social Club to improve her business. She believes that joining thegolf club will result in a higher free cash flow growth rate of 10%per year to her business. If she doesn’t join, her business willmaintain the lower free cash flow growth rate of 5% per year. Lastyear (year 0), Athena’s business had free cash flow of $100,000.However, joining the club has costs. It would cost a nonrefundableinitiation fee of $65,000 due immediately, plus an annual fee of$5,000 due at the end of each year. Either way, she’ll run thebusiness for 20 more years, at which point it will have no residualvalue, and she will stop her membership at the Golf Club. If theapplicable discount rate is 15%, should Athena join the Buena VistaGolf & Social Club?
Yes or No

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Athena is thinking about joining the Buena Vista Golf &Social Club to improve her business. She believes that joining thegolf club will result in a higher free cash flow growth rate of 10%per year to her business. If she doesn’t join, her business willmaintain the lower free cash flow growth rate of 5% per year. Lastyear (year 0), Athena’s business had free cash flow of $100,000.However, joining the club has costs. It would cost a nonrefundableinitiation fee of $65,000 due immediately, plus an annual fee of$5,000 due at the end of each year. Either way, she’ll run thebusiness for 20 more years, at which point it will have no residualvalue, and she will stop her membership at the Golf Club. If theapplicable discount rate is 15%, should Athena join the Buena VistaGolf & Social Club?Yes or No