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Timo Corporation, which operates an amusement park, is considering a capital investment in a new ride. The ride would cost $144,000 and have an estimated
Timo Corporation, which operates an amusement park, is considering a capital investment in a new ride. The ride would cost $144,000 and have an estimated useful life of 5 years. The park will sell it for $65,500 at that time. (Amusement parks need to rotate rides to keep people interested.) The ride will be expected to increase net annual cash flows by $27,000. The company's borrowing rate is 8%. Its cost of capital is 10%.Calculate the NPV of this project.
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