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Calculate the net present value of project to the company

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Thunder Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost $204,212 and have an estimated useful life of 11 years. It can be sold for $64,700 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 $27,400. The company's borrowing rate is 8%. Its cost of capital is 10%.

Question1 : Calculate the net present value of this project to the company and determine whether the project is acceptable

Reference no: EM132510108

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