Computing npv of irrigation system


1) Hidden Valley Golf Course is thinking of installing the new irrigation system on = course. Cost of installing system is= $500,000 and is incurred today. System will have useful life of= 10 years and can be depreciated in straight line method. At end of= 10 years, salvage value will be= $10,000. System will remain greens and fairways in better condition, thus attracting more golfers. Based on the market survey, course will see the incremental increase of= 2,500 rounds per year at= $40 per round. Though, irrigation system also has maintenance costs of= $20,000 per year. Hidden Valley faces a= 40% tax rate and has cost of capital of= 11%. Compute NPV of irrigation system.

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: Computing npv of irrigation system
Reference No:- TGS014968

Expected delivery within 24 Hours