Question: PLEASE ANSWER THE QUESTIONS!!!! Thank you!! A small stadium is being proposed to attract an MLS team. The $15 million-dollar initial cost is to be
PLEASE ANSWER THE QUESTIONS!!!! Thank you!! A small stadium is being proposed to attract an MLS team. The $15 million-dollar initial cost is to be spent in three stages. The initial or start-up expense (EOY 0/Stage 1) is $9M followed by a stage 2 expense of $5M in EOY 1 and a stage 3 expense of $1M at EOY 2. Because the league expects to grow, there is a capital upgrade planned for EOY 12 of another $6M. It will cost $4 million to tear down and dispose of the stadium at the end of its 25-year useful life. Cash Flow Annual Revenue dollars Annual Expenses Use the information above to answer the following: a. If the MARR is 25% per year, what is the capital recovery cost of the garage? dollars per year b. What is the AW of this project? c. Does this project fully recover its capital investment? Operating Income/Expenses $4M per year starting at EOY 3, Increasing 3% per year until 25 O Yes, the EW of the project is > 0. O No, the EW of the project is
A small stadium is being proposed to attract an MLS team. The $15 million-dollar initial cost is to be spent in three stages. The initial or start-up expense (EOY O/Stage 1) is $9M followed by a stage 2 expense of $5M in EOY 1 and a stage 3 expense of $1M at EOY 2. Because the league expects to grow, there is a capital upgrade planned for EOY 12 of another $6M. It will cost $4 million to tear down and dispose of the stadium at the end of its 25 -year useful life. Use the information above to answer the following: a. If the MARR is 25% per year, what is the capital recovery cost of the garage? dollars per year b. What is the AW of this project? dollars c. Does this project fully recover its capital investment? Yes, the EW of the project is >0. No, the EW of the project is
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