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Please include a cash flow diagram if possible. A local planning commission has estimated the first cost of a new city-owned amusement park to be
Please include a cash flow diagram if possible.
A local planning commission has estimated the first cost of a new city-owned amusement park to be exist35,000. They expect to improve the park by adding new rides every year for the next 5 years at a cost of exist6000 per year. Annual operating costs are expected to be exist12,000 the first year: these will increase by exist2000 per year until year 5. After that time, the operating expenses will remain at exist20,000 per year. The city expects to receive exist11,000 in profits the first year, exist14,000 the second, and amounts increasing by exist3000 per year until year 8, after which the net profit will remain the same. Calculate the capitalized cost of the park if the interest rate is 6% per yearStep by Step Solution
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