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Thunder Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost $181,889 and have an estimated useful life
Thunder Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost $181,889 and have an estimated useful life of 8 years. It can be sold for $60,300 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 $28,000. The companys borrowing rate is 8%. Its cost of capital is 10%. Calculate the net present value of this project to the company and determine whether the project is acceptable.
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