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Question 16 (Ignore income taxes in this problem.) The management of an amusement park is considering purchasing a new ride for $40,000 that would have
Question 16 (Ignore income taxes in this problem.) The management of an amusement park is considering purchasing a new ride for $40,000 that would have a useful life of 10 years and a salvage value of $4,000. The ride would require annual operating costs of $19.000 throughout its useful lite The company's discount rate is 8% Management is unsure about how much additional ticket revenue the new ride would generate particularly because customers pay a flat fee when they enter the park that entities them to unlimited rides. Hopefully, the presence of the ride would attract new customers How much additional revenue would the ride have to generate per year to make it an attractive investment
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