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The management of an amusement park is considering purchasing a new ride for $28,000 that would have a useful life of 4 years and a
The management of an amusement park is considering purchasing a new ride for $28,000 that would have a useful life of 4 years and a salvage value of $7,000. The ride would require annual operating costs of $35,000 throughout its useful life. The company's discount rate is 15%. Management is unsure about how much additional ticket revenue the new ride would generate-particularly because customers pay a flat fee when they enter the park that entitles them to unlimited rides. Hopefully, the presence of the ride would attract new customers. (Ignore income taxes.) Required: How much additional revenue would the ride have to generate per year to make it an attractive investment? (Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount. Omit the "$" sign in your response.) Additional revenue $D
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