SQLite Sports is considering adding a miniature golf course to its facility.
The course would cost $136,924, would be depreciated on a straight line basis over its 5-year life, and would have a zero salvage value.
The estimated income from the golfing fees would be $74,894 a year with $26,722 of that amount being variable cost.
The fixed cost would be $11,483. In addition, the firm anticipates an additional $14,982 in revenue from its existing facilities if the golf course is added.
The project will require $3,836 of net working capital, which is recoverable at the end of the project. What is the net present value of this project at a discount rate of 11.3 percent and a tax rate of 34 percent?