Blue Spruce Corporation, which operates an amusement park, is considering a capital investment in a new ride. The ride would cost $132.000 and have an estimated useful life of 5 years. The park will sell it for $62,300 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 $24.500. The company's borrowing rate is 8%. Its cost of capital is 10% Click here to view the factor table. Calculate the net present value of this project to the company. Of the net present value is negative, use either a negative sign preceding the number eg.-45 or parentheses eg. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, eg 1.25124 Round present value answer to 0 decimal places, eg 125) Net present value

Blue Spruce Corporation, which operates an amusement park, is considering a capital investment in a new ride. The ride would cost $132.000 and have an estimated useful life of 5 years. The park will sell it for $62,300 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 $24.500. The company's borrowing rate is 8%. Its cost of capital is 10% Click here to view the factor table. Calculate the net present value of this project to the company. Of the net present value is negative, use either a negative sign preceding the number eg.-45 or parentheses eg. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, eg 1.25124 Round present value answer to 0 decimal places, eg 125) Net present value

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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