Problem 14-26 (Algo) SImple Rate of Return; Payback [LO14-1, LO14-6] Sharkey's Fun Center contains a number of electronic games as well as a miniature goif course and various rides located outside the puliling. Paul Sharkey, the owner, would tike to construct a water slide on one portion of his property. Mr. Sharkey gathered the following information about the slide: a. Water slide equipment could be purchased and installed at a cost of $525,000. According to the manufacturet, the slide would be usable for 12 years after which it would have no salvage value. b. Mr. Sharkey would use straight-line depreciation on the slide equipment. c. To make room for the water slide, several rides would be dismantled and sold. These rides are fully depreciated, but they could be sold for $127,750 to an amusement park in a nearby city. d. Mr. Sharkey concluded that about 50,000 more people would use the water slide each year than have been using the rides, The admission price would be $5.00 per person (the same price the Fun Centec has been charging for the old rides) e. Based on experience at other woter slides, Mr. Sharkey estimates that annual incremental operating expenses for the slide would, be: sataries, $95,000, insurance, $5,800; utilities, $14,600, and maintenance, $11.400 Required: 6. Prepare an income statement showing the expected net operating inconceach vear from phe water silide. 2.a. Compute the simple rate of return expected from the water side 2.b. Based on the above computation, would the water slide be constructed if Mr Sharkey requires a simple fate of return of at least 3% on all investments? Required: - Prepare an income statement showing the expected net operating income each year from the water slide. 2-a. Compute the simple rate of retum expected from the water slide. 2-b. Based on the above computation, would the water slide be constructed if Mr. Sharkey requires a simple rate of return of at least 13% on all investments? 3-a. Compute the payback period for the water stide. 3-b. if Me Sharkey accepts any project with a payback period of five years or less, would the water stide be constructed? Complete this question by entering your answers in the tabs below. Prepare an income statement showing the expected net operating income each year from the water slide. repare an income statement showing the expected net operating income each year from the water slide. 2-b. Based on the above computation, would the water slide be constructed if Mc. Sharkey requires a simple rate of return of at least 13% on all investments? 3-a. Compute the payback period for the water slide. 3-b. If Mr. Sharkey accepts any project with a payback period of five years or less, would the water stide be constructed? Complete this question by entering your answers in the tabs below. Compute the simple rate of return expected from the water slide. b. Based on the above computation, would the water slide be constructed if Mr. Sharkey requires a simple rate of return of at least on all investments? a. Compute the payback period for the water slide. -b. If Mr. Sharkey accepts any project with a payback period of five years or less, would the water slide be constructed? Complete this question by entering your answers in the tabs below. Based on the above computation, would the water slide be constructed if M, sharkey requires a simple rate of return of at least 13% on all investments? 2-a. Compute the simple rate of return expected from the woter sude. 2.b. Based on the above computation, woutd the woter slide be constructed if Mr. Sharkey requires a simple rate of retum of at least 13% on all investments? 3-a. Compute the payback period for the water slide. 3-b. If Mr. Sharkey accepts any project with a payback period of five years or less, would the water slide be constructed? Comptete this question by entering your answers in the tabs below. Compute the payback penod for the water stide. (Round your answer to 2 decimal placoss) 2-b. Based on the above cite of return expected trom the water sioe. 13% on all investments? 3-a. Compute the payback period for the water slide. 3-b. If Mr, Sharkey accepts any project with a payback period of five years or less, would the water slide be constructed? Complete this question by entering your answers in the tabs below. If Mr. Sharkey accepts any project with a paybeck period of five years or less, would the water slide be constructed? Problem 14-26 (Algo) SImple Rate of Return; Payback [LO14-1, LO14-6] Sharkey's Fun Center contains a number of electronic games as well as a miniature goif course and various rides located outside the puliling. Paul Sharkey, the owner, would tike to construct a water slide on one portion of his property. Mr. Sharkey gathered the following information about the slide: a. Water slide equipment could be purchased and installed at a cost of $525,000. According to the manufacturet, the slide would be usable for 12 years after which it would have no salvage value. b. Mr. Sharkey would use straight-line depreciation on the slide equipment. c. To make room for the water slide, several rides would be dismantled and sold. These rides are fully depreciated, but they could be sold for $127,750 to an amusement park in a nearby city. d. Mr. Sharkey concluded that about 50,000 more people would use the water slide each year than have been using the rides, The admission price would be $5.00 per person (the same price the Fun Centec has been charging for the old rides) e. Based on experience at other woter slides, Mr. Sharkey estimates that annual incremental operating expenses for the slide would, be: sataries, $95,000, insurance, $5,800; utilities, $14,600, and maintenance, $11.400 Required: 6. Prepare an income statement showing the expected net operating inconceach vear from phe water silide. 2.a. Compute the simple rate of return expected from the water side 2.b. Based on the above computation, would the water slide be constructed if Mr Sharkey requires a simple fate of return of at least 3% on all investments? Required: - Prepare an income statement showing the expected net operating income each year from the water slide. 2-a. Compute the simple rate of retum expected from the water slide. 2-b. Based on the above computation, would the water slide be constructed if Mr. Sharkey requires a simple rate of return of at least 13% on all investments? 3-a. Compute the payback period for the water stide. 3-b. if Me Sharkey accepts any project with a payback period of five years or less, would the water stide be constructed? Complete this question by entering your answers in the tabs below. Prepare an income statement showing the expected net operating income each year from the water slide. repare an income statement showing the expected net operating income each year from the water slide. 2-b. Based on the above computation, would the water slide be constructed if Mc. Sharkey requires a simple rate of return of at least 13% on all investments? 3-a. Compute the payback period for the water slide. 3-b. If Mr. Sharkey accepts any project with a payback period of five years or less, would the water stide be constructed? Complete this question by entering your answers in the tabs below. Compute the simple rate of return expected from the water slide. b. Based on the above computation, would the water slide be constructed if Mr. Sharkey requires a simple rate of return of at least on all investments? a. Compute the payback period for the water slide. -b. If Mr. Sharkey accepts any project with a payback period of five years or less, would the water slide be constructed? Complete this question by entering your answers in the tabs below. Based on the above computation, would the water slide be constructed if M, sharkey requires a simple rate of return of at least 13% on all investments? 2-a. Compute the simple rate of return expected from the woter sude. 2.b. Based on the above computation, woutd the woter slide be constructed if Mr. Sharkey requires a simple rate of retum of at least 13% on all investments? 3-a. Compute the payback period for the water slide. 3-b. If Mr. Sharkey accepts any project with a payback period of five years or less, would the water slide be constructed? Comptete this question by entering your answers in the tabs below. Compute the payback penod for the water stide. (Round your answer to 2 decimal placoss) 2-b. Based on the above cite of return expected trom the water sioe. 13% on all investments? 3-a. Compute the payback period for the water slide. 3-b. If Mr, Sharkey accepts any project with a payback period of five years or less, would the water slide be constructed? Complete this question by entering your answers in the tabs below. If Mr. Sharkey accepts any project with a paybeck period of five years or less, would the water slide be constructed