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Table Six lists revenueand cost data for eleven horse parks,ranked by the number of <br />permanent statis.The dollar figures are in thousands.As may be observed from the <br />table,most horse parks experience operating losses,averaging 19%of operating costs. <br />This report's Scenario 3 is consistent with this,with losses of around 11%of total <br />costs. <br />Table Six:Comparable Facilities'Revenues and Costs <br />Operating <br />Permane Revenue Costs Profit Profit as a %of <br />Facility #nt Stalls ($1,000)($1000)($1000)Costs <br />1 217 $495 $597 -$102 -17% <br />2 300 $850 $1,500 -$650 -43% <br />3 400 $490 $586 -$96 -16% <br />4 440 $600 $1,100 -$500 -45% <br />5 460 $1,178 $1,117 $61 5% <br />6 480 $6,171 $7,447 -$1,276 -17% <br />7 484 $580 $680 -$100 -15% <br />8 550 $578 $860 -$282 -33% <br />9 672 $2,400 $2,400 $0 0% <br />10 750 $3,205 $3,558 -$353 -10% <br />11 1,100 $6,190 $7,239 -$1,049 -14% <br />Average -19% <br />Scenario 3 predicts operating losses of around $80,000 per year.This should be put in <br />perspective.Whether there are losses or gains of this amount,these results are only a <br />very small percentages of the opportunity cost of the 20 million dollar capital <br />expenditure.At a five percent interest rate,the annual interest on 20 million dollars is <br />one million dollars.The facility also requires two hundred and twenty five thousand <br />dollars forgone property tax.The opportunity cost of the facility,on an annual basis,is <br />therefore $1.225 million.If this facility provides this much value to the citizens of the <br />state,it probably also justifies another eighty thousand per year in operating subsidies. <br />32