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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 $225,000 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.)

*Please answer all four questions.

Ticket revenues $220,000 Less operating expenses: Maintenance Salaries Depreciation Insurance $80,000 70,000 13,500 25,000 Total operating expenses 188,500 Net operating income $ 31,500