Wet'n'Wild Water Company Provides White Water Rafting Experiences to Outdoor

question 82

Multiple Choice

Wet'n'Wild Water Company provides white water rafting experiences to outdoor enthusiasts.The company is in the process of analysing the purchase of new inflatable rafts and jet boats.Information on the proposal is provided below.

$\begin{array}{lr}\text {Initial investment:}\\\text { Asset } & \$ 130000 \\\text { Working capital } & \$ 32000 \\\text { Operations (per year for four years) : } & \\\text { Cash receipts } & \$ 150000 \\\text { Cash expenditures } & \$ 88000\\\text { Disinvestment: } \\\quad \text { Salvage value of drill (existing) } & \$ 10000 \\\text { Discount rate } & 20 \%\end{array}$
What is the net present value of the investment? Assume there is no recovery of working capital.

• A)$(2140)
• B)$8456
• C)$86 336
• D)$42 362

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Definitions:

Production Center

A facility or area dedicated to manufacturing or producing goods, often focused on efficiency, output, and meeting organizational production goals.

Marketing Mix

A set of actions, or tactics, that a company uses to promote its brand or product in the market, often summed up by the four Ps: product, price, place, and promotion.

GIS Technology

Geographic Information Systems Technology, a tool used for mapping and analyzing features and events on earth using spatial and geographic data.

Marketing Mix

A combination of factors that can be controlled by a company to influence consumers to purchase its products, often summarized as product, price, place, and promotion.