Question
Daniel's Theme Park is a family favorite destination. To keep up with other theme parks, Daniel is thinking of investing in a new piece of
Daniel's Theme Park is a family favorite destination. To keep up with other theme parks, Daniel is thinking of investing in a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $102,500. The equipment will have an initial cost of $442,000 and have a 5-year life. The salvage value of the equipment is estimated to be $81,000. If the hurdle rate is 11%, what is the approximate net present value? Ignore income taxes. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate facto
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