Garden City Amusements, Inc. is considering the purchase of a new log flume ride. The cost to purchase the equipment is $1,500,000 and it will cost an additional $200,000 to have it installed. The equipment has an expected life of 7 years, and it is classified as a MACRS 5-year class asset. Management expects to run about 280 rides per day, with each ride averaging 8 riders. The season will last for 160 days per year. The ticket price will be $3.00 for the first three years and $3.25 for the last four years. The variable cost per rider will be $1.00 in the first year and will increase 3% each year. The total fixed costs will be $250,000 in the first year and will also increase by 3% each year. After seven years, the ride will be dismantled (at a cost of $90,000) and the parts will be sold for $750,000. The cost of capital is 13% and the marginal tax rate is 40%. Use at least two decision criteria to evaluate this project. Explain your results.