Aqua Park can purchase a new dolphin (their old one died) for $5,000. The new dolphin will encourage greater park attendance and therefore increase the annual cash inflow by $2,000 for Years 1, 2, 3, and 4. If the cost of capital for the project is 10%, then what is the profitability index for the project?

Aqua Park can purchase a new dolphin (their old one died) for $5,000. The new dolphin will encourage greater park attendance and therefore increase the annual cash inflow by $2,000 for Years 1, 2, 3, and 4. If the cost of capital for the project is 10%, then what is the profitability index for the project?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3EA: If a copy center is considering the purchase of a new copy machine with an initial investment cost...

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