Should hazy days invest in the new pool pump

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Reference no: EM13184503

Hazy Days Pool Park must replace its pool pump at a cost of $180,000. The pump has a useful life of 10 years with an $8,000 salvage value. The required rate of return is 12 percent. The replacement is expected to generate additional day passes to the pool park amounting to profits of $20,000 and cash flows of $37,200 per year. Should Hazy Days invest in the new pool pump if the NPV approach is used?

Reference no: EM13184503

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