Compute the simple rate of return promised by the new ride

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The Heritage Amusement Park would like to construct a new ride called the Sonic Boo management feels would be very popular. The ride would cost $450,000 to construct 10% salvage value at the end of its 15-year useful life. The company estimates that t costs and revenues would be associated with the ride: (1) Assume that the Heritage Amusement Park will not construct a new ride provides a payback period of six years or less. Does the Sonic Boom ride sa requirement? Explain your answer. (2) Compute the simple rate of return promised by the new ride. If Heritage requires a simple rate of return of at least 12%, does the Sonic Boom ride m Explain your answer.

Reference no: EM131212808

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Compute the simple rate of return promised by the new ride : The Heritage Amusement Park would like to construct a new ride called the Sonic Boo management feels would be very popular. The ride would cost $450,000 to construct 10% salvage value at the end of its 15-year useful life. Compute the simple rate of ..

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