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Coolplay Corp. is thinking about opening a soccer camp in southern California. To start the camp, Coolplay would need to purchase land and build four soccer fields and a sleeping and dining facility to house 150 soccer players. Each year, the camp would be run for 8 sessions of 1 week each. The company would hire college soccer players as coaches. The camp attendees would be male and female soccer players ages 12-18. Property values in southern California have enjoyed a steady increase in value. It is expected that after using the facility for 20 years, Coolplay can sell the property for more than it was originally purchased for. The following amounts have beenestimated. Cost of land Cost to build soccer fields, dorm and dining facility Annual cash inflows assuming 150 players and 8 weeks Annual cash outflows Estimated useful life Salvage value Discount rate $330,900 $661,800 $1,014,760 $926,520 20 years $1,654,500 8% Click here to view PV table Your answer is partially correct. Try again. Calculate the net present value of the project. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round answer to O decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in th fa able provided.) Net present value 228539 Should the project be accepted? be accepted The project Should To gauge the sensitivity of the project to these estimates, assume that if only 125 players attend each week, annual cash inflows will be $887,915 and annual cash outflows will be $827,250 What is the net present value using these alternative estimates? (If the net present value is negative, use either a negative sign preceding the number eg-45 or parentheses eg (45). Round answer to O decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present value (42195) Should the project be accepted? should not be accepteod The project Assuming the original facts, what is the net present value if the project is actually riskier than first assumed and a 10% discount rate is more appropriate? (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round answer to O decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present value 4399 Should the project be accepted? be accepted The project Should LINK TO TEXT LINK TO TEXT LINK TO TEXT Your answer is correct. Assume that during the first 5 years, the annual net cash flows each year were only $44,120. At the end of the fifth year, the company is running low on cash, so management decides to sell the property for $1,469,196. What was the actual internal rate of return on the project? (Round answer to O decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor tablepovided.) Actual internal rate of return 12

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