Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Poul Sharkey, the owner, wauld like to construd a water slide on one portion d his property. Sharkey has gathered the following information aboun the
Poul Sharkey, the owner, wauld like to construd a water slide on one portion d his property. Sharkey has gathered the following information aboun the clide. 5. Worer slide equipment could be purchosed and installed at a cost \\( \\alpha \\$ 480,000 \\). A ccording to the manufacturex, the slide would be usable fa 12 yeors, after which \\( 1 \\mathrm{t} \\) waild have no solvoge value. b. Sharkey would use straight-line deprecation on the slide equipmeri. c. To make room for the water slide, several nides would be dsmantled and sold. These ndes are fully depredated but they could be sold for \\( \\$ 78,000 \\) to an amusement park in o nesrby ary. d Sharkey has conduded that about 44,000 mare peode would use the water slide each year than have been using the fides. The admssion price would be \\( \\$ 5.20 \\) per person (the same price that the Fun Centre has been charging for the ndes). e. On the basis of experience at other wisier sildes, Sharkey estimales that incemental aperating expenses each year for the silde would be Required: 1. Prepsre an incame statement showing the exoected incremental net incame each year from the water slide 2-e. Corrate the SFR expected fram the woter fice 2-a. Corroute the SRR expected fram the woter slide. 2-b. On the basis \\( \\alpha \\) this compulation, would the water shide be constructed Ir Sharkey requires an SRR of at least 144 an all investmenis? Yes No 3-a. Compule the paytback penad ror the water slide. (Round your answet to 2 decimal pleces.) 3-b. I Sharkey requlres a paybzck pericd of five years ar less, sheuld the water slide be constructed
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started