The Astro World amusement park has the opportunity to expand its size now (the end of year 0) by purchasing adjacent property for $250,000 and adding attractions at a cost of $550,000. This expansion is expected to increase attendance by 30 percent over projected attendance without expansion. The price of admission is $30, with a $5 increase planned for the beginning of year 3. Additional operating costs are expected to be $100,000 per year. Estimated attendance for the next five years, without expansion, is as follows:

a. What are the pretax combined cash flows for years 0 through 5 that are attributable to the park€™s expansion?
b. Ignoring tax, depreciation, and the time value of money, determine how long it will take to recover (pay back) theinvestment.

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Year Attendance 30,000 34,000 36.250 38,500 41,000