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The Astro World Amusement park has the opportunity to expand its size now the end of year 0 by purchasing adjacent property for $275,000
The Astro World Amusement park has the opportunity to expand its size now the end of year 0 by purchasing adjacent property for $275,000 and adding attractions at a cost of $575,000. This expansion is expected to increase attendance by 30 percent over projected attendance without expansion. The price of admission is $35, 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: Year 1 2 3 Attendance 31,000 35,000 36,750 38,500 42,000 a. What are the pretax combined cash flows for years 0 through 5 that are attributable to the park's expansion? The cash flows attributable to the park's expansion in year 1 are $______. Enter your response as an integer. 4 5
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