Marge's Campground is considering adding a miniature golf course to its facility. The course she wants...

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Marge's Campground is considering adding a miniature golf courseto its facility. The course she wants would cost $30,000, would bedepreciated on a straight line basis over the 4-year life of thecourse, and would have zero salvage value. Marge estimates theincome from the golf fees would be $28,000 a year with $10,000 ofthat amount being variable cost. The fixed cost would be $5,000.Marge feels that the course would net her, after costs, anadditional $10,000 in revenue from her existing facilities. Theproject will require $1,000 of net working capital which isrecoverable at the end of the project. What is the internal rate ofreturn on this project at a tax rate of 34 percent? a. 66.76percent b. 44.35 percent c. 26.18 percent d. 21.19 percent e. 24.50percent

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Option BWORKINGSOperating cash flowsYearNetIncome from golf feesVariable costFixed See Answer

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Marge's Campground is considering adding a miniature golf courseto its facility. The course she wants would cost $30,000, would bedepreciated on a straight line basis over the 4-year life of thecourse, and would have zero salvage value. Marge estimates theincome from the golf fees would be $28,000 a year with $10,000 ofthat amount being variable cost. The fixed cost would be $5,000.Marge feels that the course would net her, after costs, anadditional $10,000 in revenue from her existing facilities. Theproject will require $1,000 of net working capital which isrecoverable at the end of the project. What is the internal rate ofreturn on this project at a tax rate of 34 percent? a. 66.76percent b. 44.35 percent c. 26.18 percent d. 21.19 percent e. 24.50percent