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Water Country is considering purchasing a water park in Atlanta for $1,850,000. The new facility will generate annual net cash inflows of $475,000 for eight
Water Country is considering purchasing a water park in Atlanta for $1,850,000. The new facility will generate annual net cash inflows of $475,000 for eight years. Engineers estimate that the facility will remain useful for eight years and have no residual value. The company uses straight-line depreciation, and its stockholders demand an annual return of 12% on investments of this nature.
Calculate the NPV, the IRR and the probability index of this investment.
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