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Business, 18.12.2019 05:31 scottbrandon653

Thunder 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%.

calculate the net present value of this project to the company and determine whether the project is acceptable.

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