Question
A movie theatre is considering the purchase of a new three-dimensional (3D) digital projection system. The new ticket price for a 3D movie will be
A movie theatre is considering the purchase of a new three-dimensional (3D) digital projection system. The new ticket price for a 3D movie will be $15 per person, which is $4.00 higher than for the conventional two-dimensional cellulose film projection system. The new 3D system will cost $50,000. If the 3D projection system has a life of 5 years and has a salvage value of $5,000 at that time, and theatre expects to sell 10,000 tickets per year, what is the IRR of the new system?
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Intermediate Accounting
Authors: James D. Stice, Earl K. Stice, Fred Skousen
17th Edition
032459237X, 978-0324592375
