Refer to the Flint Valley Expansion Data Set. Assume that the expansion has no residual value. What
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Flint Valley Expansion Data Set
Assume that Flint Valley’s managers developed the following estimates concerning the expansion (all numbers assumed):
Number of additional skiers per day.................................................. 125
Average number of days per year that weather
conditions allow skiing at Flint Valley................................................ 160
Useful life of expansion (in years)....................................................... 8
Average cash spent by each skier per day........................................... $ 240
Average variable cost of serving each skier per day............................ $ 140
Cost of expansion .............................................................................. $ 8,000,000
Discount rate...................................................................................... 12%
Assume that Flint Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $960,000 at the end of its eight-year life.
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Related Book For
Managerial Accounting
ISBN: 978-0176223311
1st Canadian Edition
Authors: Karen Wilken Braun, Wendy Tietz, Walter Harrison, Rhonda Pyp
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