Thunder Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost $158,800 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.)

• Net Present Value:

  $