Disney wants to create a new attraction at Disneyland to capitalize on the hype surrounding the Marvel movies. They will spend $60 million today to build this new ride. This new ride would only last...


Help please not sure how to . And also how do I set this up using excel. Pearson Corporate Finance book 4th edition stand alone by Berk.


Disney wants to create a new attraction at Disneyland to capitalize on the hype<br>surrounding the Marvel movies. They will spend $60 million today to build this new<br>ride. This new ride would only last for 4 years, after which they would create a newer<br>ride for the next fad. Here are the numbers for the new ride:<br>3.<br>Year 1<br>Year 3<br>Year 4<br>Year 2<br>$94 million<br>$50 million<br>$50 million<br>$30 million<br>$1 million<br>$1 million<br>$25 million<br>$15 million<br>$0<br>$0<br>Revenues from ride<br>$85 million<br>$40 million<br>$5 million<br>$4 million<br>COGS<br>$10 million<br>$5 million<br>Advertising<br>Lost revenues from<br>existing rides<br>Increased sales of<br>$3 million<br>$5 million<br>$8 million<br>$10 million<br>merchandise<br>They will depreciate the new ride to zero over 4 years using straight-line depreciation<br>They anticipate that, four years from now, they could sell the ride for $5 million. They<br>will need to increase net working capital by $12 million today, but this amount will<br>decrease by $3 million each year until the end of the investment. They will also use land<br>that they already own for this investment; the land has a market value of $40 million and<br>a book value of $10 million.<br>Disney has a tax rate of 30% and expects a return of 11% on investments like this.<br>Should they make this investment?<br>

Extracted text: Disney wants to create a new attraction at Disneyland to capitalize on the hype surrounding the Marvel movies. They will spend $60 million today to build this new ride. This new ride would only last for 4 years, after which they would create a newer ride for the next fad. Here are the numbers for the new ride: 3. Year 1 Year 3 Year 4 Year 2 $94 million $50 million $50 million $30 million $1 million $1 million $25 million $15 million $0 $0 Revenues from ride $85 million $40 million $5 million $4 million COGS $10 million $5 million Advertising Lost revenues from existing rides Increased sales of $3 million $5 million $8 million $10 million merchandise They will depreciate the new ride to zero over 4 years using straight-line depreciation They anticipate that, four years from now, they could sell the ride for $5 million. They will need to increase net working capital by $12 million today, but this amount will decrease by $3 million each year until the end of the investment. They will also use land that they already own for this investment; the land has a market value of $40 million and a book value of $10 million. Disney has a tax rate of 30% and expects a return of 11% on investments like this. Should they make this investment?

Jun 03, 2022
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