Question
[The following information applies to the questions displayed below.] The Heritage Amusement Park would like to construct a new ride called the Sonic Boom, which
[The following information applies to the questions displayed below.] |
The Heritage Amusement Park would like to construct a new ride called the Sonic Boom, which the park management feels would be very popular. The ride would cost $325,000 to construct, and it would have a 10% salvage value at the end of its 15-year useful life. The company estimates that the following annual costs and revenues would be associated with the ride: (Ignore income taxes.) |
Ticket revenues | $ | 220,000 | ||||||||||||||||||||||||||||||||||
Less operating expenses: | ||||||||||||||||||||||||||||||||||||
Maintenance | $ | 40,000 | ||||||||||||||||||||||||||||||||||
Salaries | 60,000 | |||||||||||||||||||||||||||||||||||
Depreciation | 19,500 | |||||||||||||||||||||||||||||||||||
Insurance | 55,000 | |||||||||||||||||||||||||||||||||||
Total operating expenses | 174,500 | |||||||||||||||||||||||||||||||||||
Net operating income | $ | 45,500 | ||||||||||||||||||||||||||||||||||
24. Required information
25. Required information
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