Question 1 (9 marks) A company is building an amusement park and has the following projected cashflows. Costs consist of building costs and staff salaries: Year Building costs (assume as being paid at start of Staff salaries each respective year) $100,000 $4,000 for year 1, increasing by a discrete step of $100 at the start of each future $50,000 year, but paid continuously throughout $30,000 each year, every year into the future $45,000 $0 for year 5 and all future years Revenue consists of ticket sales, merchandise sales, and food and beverage sales: Year Tickets Merchandise Food and beverages | All $2,000 per month for all $4,250 per year, increasing by $50 per years. Assume as paid at end Equal to 5 of year in each future year. Assume the of each month. ticket sales amount in each year is earned (paid) in the middle of each year. Investors in the amusement park want to know what the Net Present Value (NPV) of this project is, assuming: a risk discount rate (effective yield) of 14% per annum; and a 30-year time horizon (i.e. all costs and revenues cease after 30 years). (a) Calculate the present value of costs. Show all workings. [4 marks] (a) Calculate the present value of revenue. Show all workings. [4 marks] (b) Hence, calculate the NPV of the overall project. [1 mark]