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Valley Club is considering adding a miniature golf course to its facility. The course would cost...

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Finance

  1. Valley Club is considering adding a miniature golf course to itsfacility. The course would cost $44,000, would be depreciated on astraight-line basis over its 4-year life, and would have a zerosalvage value. The estimated income from the golfing fees would be$33,000 a year with $9,000 of that amount being variable cost. Thefixed cost would be $6,200. The project will require $3,000 of networking capital, which is recoverable at the end of the project.What is the net present value of this project at a discount rate of12 percent and a tax rate of 20 percent?

    $2,152.90

    $8,734.16

    $4,840.58

    $6,412.69

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