Chapter 10 - 11 Business Policies

Which of the following should have the least influence in determining the proper green fee rate?

• A. Slope rating

• B. Strategy required on golf course

• C. Competitors’ fees

• D. Number of different types of grasses seeded on course

If the price is decreased by 25%, the number of additional rounds would have to increase by what percentage to offset the discount?

• A. 11.11%

• B. 17.65%

• C. 25.00%

• D. 33.33%

If the price is increased by 50%, the decrease in rounds that will produce the same gross revenue is?

• A. 33.33%

• B. 66.67%

• C. 81.82%

• D. 100.00%

The options available to the course owner to implement revenue are limited by?

• A. Competitors’ pricing

• B. Supply exceeds demand in the golf industry

• C. Accelerating expenses and declining revenue

• D. Golf course owner’s limited capacity to comprehend the subject matter and how to implement.

The rack rate is usually paid by?

• A. Less than 25% of people per day

• B. 26% to 50% of people per day

• C. 51% to 75% of people per day

• D. Over 100% of people per day

Contrary to standard industry practices, some states have developed their own valuation methods for golf courses that include all but the following:

• A. Base cost per hole

• B. Subjective valuation of quality

• C. Design of course

• D. Terrain

Which of the following is not a valid valuation method for determining the price for a golf course?

• A. Book Value

• B. Liquidated Value

• C. Excess Earnings

• D. None of the above

Twenty-five percent of all golf courses, though not currently publicly listed for sale, would be sold by the owner with any reasonable offer.

• True

• False

The value of the golf course is determined by an appraisal, which has more importance than the historical financial statements.

• True

• False

The two most frequently used valuation methods are the discounted cash flow (income approach) and comparative market value.

• True

• False