The Owner of an Amusement Park Is Considering Installing a New

question 164

Essay

The owner of an amusement park is considering installing a new ride.The ride would cost $10,000,produce a net cash flow of $1,250 annually,and last for nine years.
a. Assuming an interest rate of 10 percent, what is the present value of the net cash flows expected from the ride? Use future value and/or present value tables in calculating your answer. Round amounts to the nearest dollar.
b. Should the ride be purchased?

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Definitions:

Social Entrepreneurship

The practice of creating businesses with the primary goal of achieving social impact rather than maximizing profits alone.

Multiple Sources

Relying on or referring to more than one origin or point of information.

Government Contracts

Agreements entered into by government entities and private companies or individuals for the provision of goods, services, or execution of works.

State Taxes

Taxes imposed by individual states in a country, which can include income, sales, property, and other forms of taxation.