The Komodo dragon is the largest lizard in the world, growing up to 9.8 feet long. They are found only on several Indonesian islands and are venomous, with their bites often proving fatal within days. As a result, Komodo dragons have become a popular tourist attraction at Komodo National Park. A 2000 study estimated the annual willingness to pay for visits was $554,864.70 in 2011 dollars, while annual operating costs in 2023 were $468,157.34. The park now needs fence repairs costing $83,000 annually for 2023-2025, requiring a loan while remaining open.

1. The Komodo Dragon is the largest species of lizard on earth. It is found in a small group of
Indonesian Islands and grows to a maximum length of 9.8 ft. They are aggressive, venomous and
have septic pathogens in their saliva, which cause bits to become fatal within days. Given the
nature of these beasts, they have become a major tourist attraction. Walpole et. al. Conservation
Biology (2000) produce annual willingness to pay estimates for Komodo National Park visits at
$554,864.70 in 2011 dollars. Annual operating expenses in 2023 dollars were $468,157.34.
Assume the park needs major fence repairs which will occur in year 0 (2023) while the park
remains operational which requires loan financing with $83,000 in repayment, annually for
2023-2025. Assume a social discount rate of 7 percent, and an inflation rate of 3.4 percent.
Showing your work, Answer the following: Which costs and benefits at the start of the problem
are in real terms?