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e https//edugen wileyplus.com/edugen/student/mainfr.uni Onlin Hudson Valley FCUInstagramMyDec P Pendora Internet Re Photography 3 Wattpad YouTube Weygandt, Managerial Accounting, 7e MANAGERIAL ACCOUNTING(A ctice Gradebook ORION Downloadable eTextbook nment Brief Exercise 12-3 Your answer is partially correct. Try again. T under Corporation, an amusement park is considering a capital investme t in new e hibe The exhbt sida usz ie and nea et ated hi dent sold for $66,900 at that time. (Amusement parks need to rotate exhibits to keep people interested.) It is expected to increase net annual cash flows by $27,300. The compeny's borrowing rate is 8%. Its cost of capital is 10%, C ckheretonenpytab Calculate the net present value of this project to the company and determine whether the project is acceptable. (tf the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For caleulation purposes, use 5 decimal places as dfisplayed in the factor table provided Round present valve answer to 0 decimal places, e.g. 125. Net present value The project not acceptable. serro Question Attempts: 1 of 5 used

Explanation / Answer

Net present value of the project Cash inflow $27300 x 6.1446 $167,747.58 Salvage or terminal value of exhibit $66900 x 0.3855 $25,789.95 Total cash inflow $193,537.53 Less: Initail cash outflow $197,160.00 NPV ($3,622.47) Present value of annuity of $1 at 10% is 6.1446 Present value of $1 at 10% for year 10 is 0.3855

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