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Water Planet _Capital Investment decision




Question;Water Planet is considering purchasing a;water park in Atlanta, Georgia, for $1,870,000. The new facility will generate;annual net cash inflows of $460,000 for eight years. Engineers estimate that;the facility will remain useful for eight years and have no residual value. The;company uses straight-line depreciation, and its stockholders demand an annual;return of 10% on investments of this nature.;REQUIREMENTS;1.;Compute the payback, the ARR;the NPV, the IRR, and the profitability index of this investment.;2.;Recommend whether the company;should invest in this project.


Paper#38944 | Written in 18-Jul-2015

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