Determining attractive investments

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The management of an amusement park is considering purchasing a new ride for $60,000 that would have a useful life of 15 years and a salvage value of $8,000. The ride would require annual operating costs of $26,000 throughout its useful life.The company's discount rate is 10%. Management is unsure about how much additional ticket revenue the new ride would generate particularly since customers pay a flat fee when they enter the park that entitles them to unlimited rides. hopefully, the presence of the ride would attract new customers. how much additional revenue would the ride have to generate per year to make it an attractive investments.

Reference no: EM13147242

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