The City of Greenville Has Decided to Build a Softball

question 7

Essay

The City of Greenville has decided to build a softball complex on a piece of property donated by one of the city
residents. The city council has already voted to fund the project at a level of $800,000 (initial capital investment).
The city engineer has collected the following financial information for the project.
• Annual upkeep costs: $120,000
• Annual utility costs: $13,000
• Renovation costs: $50,000 for every 5 years
• Annual team user fees (revenues): $32,000
• Useful life: Infinite
• Interest rate: 5%.
If the city expects 40,000 visitors to the complex each year, what should be the minimum ticket price per
person, so that the city can break-even?

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Definitions:

Club Sponsor

An entity or individual that provides financial or material support to a club or team, often in exchange for advertising or promotional benefits.

Junk Computer Parts

Discarded or obsolete components of computers that are no longer usable or needed for their original purpose.

Surge Pricing

A dynamic pricing strategy where prices are increased due to higher demand.

Demand Increase

A rise in the quantity of goods or services that consumers are willing and able to purchase at a given price.