Sharkey's Fun Center contains a number of electronic games as well as a miniature golf course and various rides located outside the building Paul Sharkey, the owner would like 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 $585,000. According to the manufacturer, the side 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 shde, several nides would be dismantled and sold. These rides are fully depreciated, but they could be sold for $160,000 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 40 per person (the same price the Fun Center has been charging for the old rides) e Based on experience at other water slides, Mr. Sharkey estimates that annual incremental operating expenses for the slide would be salaries, 599,000, insurance $6.200 utilities, 515,000, and maintenance $11.800 Required: 1. Prepare an income statement showing the expected net operating income each year from the water slide 2-a Compute the simple rate of return expected from the water slide 26. Based on the above computation would the water slide be constructed it Mr Sharkey requires a simple rate of return of at least 14% on all Investments? 3-a. Compute the payback period for the water slide 3-6. Mr. Sharkey accepts any project with a payback period of five years or less would the water slide be constructed