Shatkey's Fun Center contains a number of electronic games as well as a miniature golf course and various rides located outside the buliding Paul Sharkey, the owner, would like to construct a water slide on one portion of his property. Mr. Sharkey gathered the followng information about the slide: a. Water slide equipment could be purchased and installed at a cost of $375,000. According to the manufacturer, the stide 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 toom for the water slide, several rides would be dismantlediand sold. These rides are fully depreciated, but they could be sold for $100,250 to an amusement park in a nearby city. a. Mr Sharkey concluded that about 50,000 more people would use the water slide each year than have been using the rides. The aditission price would be $4.00 per person (the same price the Fun Center has been charging for the old rides) 6. Based on experience at other water slides, Mr. Sharkey estimates that annual incremental operating expenses for the slide would be: sataries, $85,000, instirance, $4,800, utilties, $13,600; and maintenance, $10,400. Required: 1. Prepare an income statement showing the expected net operating income each year from the water slide. 2-o. Compute the simple rote of retuin expected from the water silde. 2-b. Based on the above computation, would the water side be constructed in Mr. Sharkey requires a simple rate of return of at least 12% 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 yedrs or less, would the water slide be constructed? Shatkey's Fun Center contains a number of electronic games as well as a miniature golf course and various rides located outside the buliding Paul Sharkey, the owner, would like to construct a water slide on one portion of his property. Mr. Sharkey gathered the followng information about the slide: a. Water slide equipment could be purchased and installed at a cost of $375,000. According to the manufacturer, the stide 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 toom for the water slide, several rides would be dismantlediand sold. These rides are fully depreciated, but they could be sold for $100,250 to an amusement park in a nearby city. a. Mr Sharkey concluded that about 50,000 more people would use the water slide each year than have been using the rides. The aditission price would be $4.00 per person (the same price the Fun Center has been charging for the old rides) 6. Based on experience at other water slides, Mr. Sharkey estimates that annual incremental operating expenses for the slide would be: sataries, $85,000, instirance, $4,800, utilties, $13,600; and maintenance, $10,400. Required: 1. Prepare an income statement showing the expected net operating income each year from the water slide. 2-o. Compute the simple rote of retuin expected from the water silde. 2-b. Based on the above computation, would the water side be constructed in Mr. Sharkey requires a simple rate of return of at least 12% 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 yedrs or less, would the water slide be constructed