Valley Swim Club1
The Valley Swim Club has 300 stockholders, each holding one share of stock in the club. A share of club stock allows the shareholder's family to use the club's heated outdoor pool during the summer upon payment of annual membership dues of $175. The club has not issued any new stock in years, and only a few of the existing shares come up for sale each year. The board of directors administers the sale of all stock. When a shareholder wants to sell, he or she turns the stock into the board, which sells it to the person at the top of the waiting list. For the past few years, the length of the waiting list has remained relatively steady at approximately 20 ...view middle of the document...
However, at a recent board meeting a number of new applicants had attended and asked the board to issue new shares. In addition, a number of current shareholders suggested that this might be an opportunity for the club to raise some capital for needed repairs and to improve some of the existing facilities. This was tempting to the board. Although it had set the share price at $500 in the past, the board could set it at a much higher level now. In addition, any new shares sold would result in almost total profit since the manager, lifeguards, and maintenance costs had already been budgeted for the summer and would not increase with additional members.
Before the board of directors could make a decision on whether to sell more shares and, if so, how many, the board members felt they needed more information. Specifically, they would like to know the average number of people (family members, guests, etc.) that might use the pool each day during the summer. They would also like to know the number of days they could expect over 500 people to use the pool from June through August, given their current number of shares.
The board of directors has the following daily attendance records for June through August from the previous summer; it thinks the figures would provide accurate estimates for the upcoming summer.
|139 |380 |193 |399 |177 |238 |
|273 |367 |378 |197 |161 |224 |
|172 |359 |461 |273 |308 |368 |
|275 |463 |242 |213 |256 |541 |
|337 |578 |177 |303 |391 |235 |
|402 |287 |245 |262 |400 |218 |
|487 |247 |390 |447 |224 ...