
Capital Budgeting and Team Investments ◾ 387
Facility Investments
Financial analysts have to focus on the net present value (NPV) and the internal rate
of return (IRR) from a new facility. As illustrated in Chapter 9, a new facility will
increase attendance ceteris paribus (with all other factors remaining the same).* A
successful new facility should produce nancial benets that exceed the costs. e
benets, as well as the costs, are not always straightforward and easy to calculate.
First, what is the counterfactual to a new facility? In other words, what would hap-
pen if a new facility were not built? Maybe the old facility would continue ...