6. The city is considering creating a new entertainment park to provide an additional recreational option for its citizens. The center would contain go-karts, a mini-golf course, and a game room. The construction costs of the center would be incurred immediately, but the park would open in stages. The game room would be open after one year, the mini-golf course after two years, and the go-kart track after three years. After opening in year 1, the park would be in operation for the 15 years. At the end of 15 years the entertainment facilities will be worn out, and worth nothing. No admission fee will be charged, but patrons will be charged a nominal fee to use each of the attractions. The data for the project are indicated in the Table below. Note that all values are in Nominal Dollar Terms (actual market values), initially valued in the end of year zero dollars, and increasing at the rate of X% per year in nominal terms. The inflation rate is 2% per annum. All annual values accrue at the end of each year. IIIIIIIII IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII IIIIIIIIIIIIIII Table Variable Benefits/Costs (Start in Period 1) Benefits Revenue from game room: Year 1 value = $95,000, rising at 6% per year. Revenue from mini-golf: Year 2 value = $160,000, rising at 3% per year. Revenue from go-karts: Year 3 value = $225,000, rising at 5% per year. Operating Costs Annual Labor Costs: Initial Value = $150,000 and rising at 5% per year. Annual Energy Costs: Initial Value = $20,000 and rising 6% per year. Annual Maintenance Costs: Initial Value $45,000 and rising 7% per year. Annual Insurance Costs: Initially $14,000 and rising 4% per year. Fixed Costs (Incurred in Period 0) Equipment purchase: $920,000 Equipment installation: $270,000 Land Costs: $625,000 Licensing, inspections, etc: $10,000 Your Task: Calculate the NPV of the investment at a REAL discount rate of 5%. Based on your analysis, indicate whether or not you would recommend creating the entertainment park