90.2K

Verified Solution

Link Copied!

MidWest Amusements is in the process of reviewing 10 proposals for new rides at its theme parks in cities scattered throughout the American heartland. The companys only experienced safety engineer must carefully review plans and monitor the construction of all new rides. However, she is only available to work on new rides for 1,343 hours during the year. The net present values and the amount of safety engineer time required for the proposed rides are listed below:

Proposed Ride Net Present Value Safety Engineer Time Required (hours) Ride 1 $ 654,300 180 Ride 2 1,088,000 340 Ride 3 710,400 320 Ride 4 617,100 170 Ride 5 563,750 250 Ride 6 279,950 110 Ride 7 343,200 143 Ride 8 654,000 150 Ride 9 331,080 178 Ride 10 472,140 258 Total $ 5,713,920 2,099 Required: 1. Which of the proposed rides should the company build this year? (Note: The incremental profit of a long-term project such as constructing a new ride is its net present value.) (You may select more than one answer. Single click the box with a check mark for correct answers and double click to empty the box for the wrong answers.) Ride 1 Ride 6 Ride 3 Ride 4 Ride 5 Ride 2 Ride 8 Ride 10 Ride 7 Ride 9 2. What would be the total net present value of the rides built under your plan? Total $0

Answer & Explanation Solved by verified expert

See Answer