Question
Brief Exercise 24-3 Thunder Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost $150,425 and have an
Brief Exercise 24-3 Thunder Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost $150,425 and have an estimated useful life of 9 years. It will be sold for $69,600 at that time. (Amusement parks need to rotate exhibits to keep people interested.) It is expected to increase net annual cash flows by $20,300. The companys borrowing rate is 8%. Its cost of capital is 10%. Click here to view PV table. Calculate the net present value of this project to the company and determine whether the project is acceptable.
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