26 Jun The directors of Sunshine Theme Parks Limited are considering opening
The directors of Sunshine Theme Parks Limited are considering opening a new the park me in the holiday resort. They have lease land for five years, and have been granted a license to operate the theme park for five years. Additional information Forecasts show that the initial cost of the investment will be $6 000 000. The investment of $6 000 000 includes 6 rides, costing $150 000 each. The rides are to be depreciated over 5 years using the straight-line depreciation method at a rate of 20% per year. Running expenses, including depreciation for the rides, for the first three years are forecast to be $1 000 000 per year. In year four, running expenses, including depreciation, are forecast to rise by $200 000. In year five, running expenses are forecast to stay at the same level as in year four. · For the first three years it is forecast that the theme park will operate for 210 days per year, with an average of s00 visitors per day, each paying a $25 entrance fee. in year four, it is forecast that the theme park will operate for 210 days, with an average of 600 visitors a day, each paying a $30 entrance fee. These figures are expected to stay the same for year five. It is company policy to have a payback period of five years on investment projects. And the opportunity cost of capital is 16%. Required: (1) Calculate the payback period of this project. (2) Calculate the net present value of this project. (3) Evaluate the project on behalf of Sunshine Theme Parks Limited. (4) Which factors should you consider, when making the investment decisions?
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.