Laserfiche WebLink
Table Six lists revenue and cost data for eleven horse parks, ranked by the number of <br />permanent stalls- 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 I I% of total <br />costs. <br />Table Suc: Comparable Facilities' Revenues and Costs <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 re suits 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 <br />Operating <br />Pennane <br />Revenue <br />Costs <br />Profit <br />Prat as a % of <br />Facility # <br />nt Stalls <br />($1,000) <br />($1000) <br />($1000) <br />Cam <br />1 <br />217 <br />$4955 <br />$597 <br />-$102 <br />-17% <br />2 <br />300 <br />$850 <br />$1,500 <br />-$650 <br />-43% <br />3 <br />400 <br />$490 <br />496 <br />-16% <br />4 <br />440 <br />$600 <br />$11100 <br />4500 <br />45% <br />5 <br />460 <br />$1,178 <br />$1,717 <br />$61 <br />5% <br />6 <br />480 <br />$6,171 <br />$7,447 <br />X1,276 <br />-17% <br />7 <br />484 <br />$580 <br />$680 <br />4100 <br />-15% <br />8 <br />550 <br />$578 <br />$560 <br />-$282 <br />-33% <br />9 <br />672 <br />$2,400' <br />$2,400 <br />$0 <br />0% <br />10 <br />750 <br />$3,205 <br />$3,658 <br />4353 <br />-10% <br />11 <br />1,100 <br />$6,190 <br />$7,239 <br />,$1,049 <br />-14% <br />Average <br />-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 re suits 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 <br />