1. The initial cost for the construction of an amusement park is 5,000,000 $. The annual keep up cost is 120,000$, and the renovation cost is 250,000 every five years. 120,000 people are expected to visit the park in a year. The city which owns the park uses a 4% annual MARR. What should be the entrance fee so that the city breaks even? a) 3.23 $ b) 3.05 $ c) 3.41 $ d) 3.66 $
1. The initial cost for the construction of an amusement park is 5,000,000 $. The annual keep up cost is 120,000$, and the renovation cost is 250,000 every five years. 120,000 people are expected to visit the park in a year. The city which owns the park uses a 4% annual MARR. What should be the entrance fee so that the city breaks even? a) 3.23 $ b) 3.05 $ c) 3.41 $ d) 3.66 $
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![1. The initial cost for the construction of an amusement park is 5,000,000 $.
The annual keep up cost is 120,000$, and the renovation cost is 250,000
every five years. 120,000 people are expected to visit the park in a year. The
city which owns the park uses a 4% annual MARR. What should be the
entrance fee so that the city breaks even?
a) 3.23 $
b) 3.05 $
c) 3.41 $
d) 3.66 $](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F95c9b4bd-efa8-4df0-bbe5-137b4b1d4602%2F98bb886b-11d9-417d-a7a4-18f27d5da662%2Fhr67o4_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1. The initial cost for the construction of an amusement park is 5,000,000 $.
The annual keep up cost is 120,000$, and the renovation cost is 250,000
every five years. 120,000 people are expected to visit the park in a year. The
city which owns the park uses a 4% annual MARR. What should be the
entrance fee so that the city breaks even?
a) 3.23 $
b) 3.05 $
c) 3.41 $
d) 3.66 $
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