The management of an amusement park is considering purchasing a new ride for $85,000 that would have a useful life of 10 years and a salvage value of $10,50O. The ride would require annual operating costs of $34,500 throughout its useful life. The company's discount rate is 9%. Management is unsure about how much additional ticket revenue the new ride would generate-particularly since customers pay a flat fee when they enter the park that entitles them to unlimited rides. Hopefully, the presence of the ride would attract new customers. (Ignore income taxes.) Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. Required: How much additional revenue would the ride have to generate per year to make it an attractive investment? (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Additional revenue

The management of an amusement park is considering purchasing a new ride for $85,000 that would have a useful life of 10 years and a salvage value of $10,50O. The ride would require annual operating costs of $34,500 throughout its useful life. The company's discount rate is 9%. Management is unsure about how much additional ticket revenue the new ride would generate-particularly since customers pay a flat fee when they enter the park that entitles them to unlimited rides. Hopefully, the presence of the ride would attract new customers. (Ignore income taxes.) Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. Required: How much additional revenue would the ride have to generate per year to make it an attractive investment? (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Additional revenue

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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