Jo Quick is managing director to the Tot Lot Day Care Centre..Jo Quick's trying to determine whether the centre should expand its facilities to incorporate a newborn care room for infants between the age of 6 weeks and 12 months Tot Lot is currently set up as a full-time care years
facility for children between the age of 12 months 6
The necessary space already exist. An investment of $20,000.00 would be needed, to purchase cribs, high chairs, etc. equipment will have a 5yrs usefu life with zero salvage value
- Each parent will be charged $125.00 weekly
- Operating Exp. Will be 52 weeks of the year
- Payroll $60,000
- Misc 6,000.00 annually
- Determine annual net income, net annual cash flows for new nursery
- Compute the cash payback period for new nursery, the annual rate of return
- Compute the net present value of newborn care room
- Conclude from theses computation what Jo Quick do?