NTER VERSIONBACK NEXT Question 1 The Oklahoma City Zoo has proposed adding to th
ID: 2787817 • Letter: N
Question
NTER VERSIONBACK NEXT Question 1 The Oklahoma City Zoo has proposed adding to their Web site a major segment providing a virtual tour of the grounds and animals, suitable for both routine enjoyment and educational purposes in classrooms. Survey data indicate that this will have either a neutral or positive effect upon actual zoo attendance. The Web site will be professionally done and have an initial cost of $340,000 Upkeep, refreshing the videos, and developing videos for scientific research and entertainment will cost another $75,000 per year. The zoo is expected to be in operation for an indefinite period however, a study period o only 10 years or the web site is to be assumed with only a residual salvage value o $58 000 r the arch a value being anticipated Interes is 7% A estimated 80,000 persons will visit the e-zoo in the first year, increasing by 31,000 each year, and they will receive, on the average, an additional $0.90 of benefit per visit when the new area is complete Click here to access the TVM Factor Table Calculator Step 1 Calculate benefit-cost ratio and benefits minus costs. Round answer to 3 decimal places. The tolerance is ± 0.1. B/C B-C Click if you would like to Show Work for this question: Round answer to nearest whole dollar. The tolerance is ± 10. Open Show WorkExplanation / Answer
Benefit cost ratio = Present value of Cash inflow / Present value of cash outflow
= 781677.4 / 340000
= 2.299
B-C = PVCI - PVCO
= 781677.4 - 340000
= 441677.4
Please note all values are in $.
In case of further clarification required please comment.
person 80000 111000 142000 173000 204000 235000 266000 297000 328000 359000 Year 0 1 2 3 4 5 6 7 8 9 10 Initial Cost -340000 Revenue 72000 99900 127800 155700 183600 211500 239400 267300 295200 323100 less Cost of operation 75000 75000 75000 75000 75000 75000 75000 75000 75000 75000 Resuidual value 58000 EBIT -3000 24900 52800 80700 108600 136500 164400 192300 220200 306100 less tax Not given 0 0 0 0 0 0 0 0 0 0 Cash flow -340000 -3000 24900 52800 80700 108600 136500 164400 192300 220200 306100 discouting @7% 1 0.934579 0.873439 0.816298 0.762895 0.712986 0.666342 0.62275 0.582009 0.543934 0.508349 Cash flow -340000 -2803.74 21748.62 43100.53 61565.64 77430.3 90955.71 102380.1 111920.4 119774.2 155605.7Related Questions
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