Dive Club Example 2:
8 members finance one 8-week share
Year 1:
8 members of a 20-member club each pay $3242 to finance the share price and one year of maintenance fees. [($25,000 ÷8)+($78x12÷8)] The remaining 12 club members pay $350 each for a club-sponsored trip to Cayman Brac, using 4 weeks of the club’s share to reserve 4 apartments for 7 days. The remaining 4 weeks of lodging are rented to another club or dive shop for $4000.
Year 1 cash flow = -$17,936
Years 2 & 3:
Club pays $936 for one year of maintenance fees. [$78x12]16 club members pay $250 each for a club-sponsored trip to Cayman Brac, using 4 weeks of the club’s share to reserve 4 apartments for 7 days. The four remaining weeks of lodging are rented to another club or dive shop for $4000.
Annual cash flow = +$7,064, which is used to repay the original investment.
Year 4 and beyond:
Year 4’s cash flow = +$7,064, which is used to repay the last $3808 of the original investment, leaving the club with income of $3,256. The $7064 generated in all subsequent years pays for the club’s trips and activities.
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