3. The management of an amusement park is considering purchasing a new ride for $95,000that would have a useful life of 10 years. The company has estimated that the net presentvalue of all cash flows except salvage value from the initial investment and annual cashinflows is ($4,853). The company's discount rate is 9%. What would the salvage value ofthe ride in 10 years need to be to make this investment attractive?

Given DataStep 1.initial_investment = $95000# Initial cost of the ride npv _excluding _salvage…

Answered: 3. The management of an amusement park…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 13P

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