and determine its acceptability. 5.15 A university is trying to determine how much it should charge for tickets to basketball games to help offset the expenses of the new arena. The cost to build the arena including labor, materials, etc. was $92 million. Each year the mainte- nance cost is expected to increase by 5% as the building gets older. The mainte- nance cost for the first year is $150,000. Utilities are expected to average about $200,000 per year and labor costs $300,000. The average attendance at basket- ball games over the year is expected to be 100,000 people (or 100,000 tickets sold to events). Assuming the arena has no other source of income besides regu- lar ticket sales (not including student tickets) for basketball games, what should the university charge so that it can recover at least 6% cost of borrowing on its investment? The university expects the arena to be used for 40 years and to have no appreciable salvage value