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Fun World Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost $150,152 and have an estimated
Fun World Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost $150,152 and have an estimated useful life of 6 years. It can be sold for $69,100 at the end of that time. (Amusement parks need to rotate exhibits to keep people interested.) It is expected to increase net annual cash flows by $26,700. Its cost of capital is 10%. Present value factor of cash inflows for 6 years is 4.355. Present value factor of cash inflow for salvage value at year 6 is 0.564. Calculate the net present value of this project to the company and determine whether the project is acceptable. (Hint: For the present value of net cash flows, both net annual cash flows in current value and salvage value in current value should be added together.) . Round net present value to 0 decimal place such as 20. For any negative net present value, use either a negative sign preceding the number as-30 or parentheses as (30). Do NOT enter a dollar sign. For example, if you are typing $10,000 as your answer, answer should be typed as 10,000 without any dollar sign. Net Present Value: $ The project is (Write either acceptable or not acceptable.)
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