Bold’s Gym, a health club chain, is considering expanding into a new location: the initial investment would be $1 million in equipment, renovation, and a 6-year lease, and its annual upkeep and expenses would be $75,000 (paid at the beginning of the year). Its planning horizon is 6 years out, and at the end, it can sell the equipment for $50,000. Club capacity is 500 members who would pay an annual fee of $600. Bold’s expects to have no problems filling membership slots. Assume that the interest rate is 10%. (See Table S7.2)
a) What is the present value profit/loss of the deal?
b) The club is considering offering a special deal to the members in the first year. For $3,000 upfront they get a full 6-year membership (i.e., 1 year free). Would it make financial sense to offer this deal?
Cash collections from customers$710 Purchase of used equipment 155 Depreciation expense 155 Sale of investments 360 Dividends received 110 Interest received 155 How would...Sep 05 2020
According to neoliberal theory, the state should: O Create and preserve an institutional framework appropriate for individual entrepreneurialism Remove regulations that l...Feb 07 2020
Consider the market for automobiles, suppose that the income level of consumers increases and at the same time the price of steel (an input to automobile production) fall...Apr 15 2020
name four reasons why the North won the Civil War, one answer would be:response: Industry: the North had greater industrial capacity that better supplied the troopsMy qu...Mar 17 2020
Ships arrive at a port facility at an average rate of 2 ships every 3 days. On the average, it takes a single crew 1 day to unload a ship. Assume that interarrival and se...Aug 10 2020
Window Help Tools 18'19.pdf (page 4 of 13)-Edited Highlight Rotate Markup SULIT EUP222 -4- (b). Holden Engineering Company has been offered a five-year contract to supply...Aug 16 2020
Wilm Schmidt, the owner of Wilm s Window Washing Services, had difficulty getting the debits to equal credits on the January 31, 2014, trial balance. The following errors...Apr 06 2020
Behaviors that influence what an animal eats and how it obtains its food are called (A) Foraging behaviors (B) Social behaviors (C) Territorial behaviors (D) Euso...Mar 20 2018
1. In selecting abutments, what steps can be taken to give a bridge spanning traffic a feeling of openness?2. In what ways do integral abutment and joint less bridge desi...May 10 2020
Lori cakkebaut opened callebaut cleaning service, Ag on july 1, 2017July113512182021253131Shareholders invested €20,000 cash in the business in exchange for ordinaryshare...Dec 06 2019