Lincoln Park Zoo in Chicago is considering a renovation that will improve some physical facilities at a

Question:

Lincoln Park Zoo in Chicago is considering a renovation that will improve some physical facilities at a cost of \(\$ 1,800,000\). Addition of new species will cost another \(\$ 310,000\). Additional maintenance, food, and animal care and replacement will cost \(\$ 145,000\) in the first year, increasing by 3 percent each year thereafter. The zoo has been in operation since 1868 and is expected to continue indefinitely; however, it is common to use a 20-year planning horizon on all new investments. Salvage value on facilities after 20 years will be 40 percent of initial cost. Interest is 7 percent. An estimated 1.5 million visits per year are made to the zoo, and the cost remains free year-round. How much additional benefit per visit, on average, must the visitors perceive to justify the renovation?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Principles Of Engineering Economic Analysis

ISBN: 9781118163832

6th Edition

Authors: John A. White, Kenneth E. Case, David B. Pratt

Question Posted: