Current Attempt in Progress Your answer is partially correct. Wildhorse Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost $228,365 and have an estimated useful life of 12 years. It can be sold for $63,000 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 $30.000 Th

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Current Attempt in Progress
Your answer is partially correct.
Wildhorse Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit
would cost $228,365 and have an estimated useful life of 12 years. It can be sold for $63,000 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 $30,000. 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 and determine whether the project is
acceptable. (If 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. Round present value answer to 0 decimal places, e.g. 125.)
Net present value
$
The project is unacceptable
22,735
Transcribed Image Text:Current Attempt in Progress Your answer is partially correct. Wildhorse Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost $228,365 and have an estimated useful life of 12 years. It can be sold for $63,000 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 $30,000. 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 and determine whether the project is acceptable. (If 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. Round present value answer to 0 decimal places, e.g. 125.) Net present value $ The project is unacceptable 22,735
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