The Astro World amusement park has the opportunity to expand its size now (the end of year 0) by purchasingadjustment property for $250,000 and adding attractions at a cost of $550,000. This expansion is expected to increaseattendance by 30% over projected attendance without expansion. The price of admission is $30, with a $5 increaseplanned for the beginning of year 3. Additional operating costs are expected to be $100,000 per year. Estimatingattendance for the next five years, without expansion, follows:YEAR 1 2 3 4 5ATTENDANCE 30,000 34,000 36,250 38,500 41,000a. 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
