The Mountain Top Resort is evaluating the purchase of a nearby ski lodge. The managers of Mountain Top have estimated that the ski lodge will generate

$500,000 in OCF each year for the next 10 years. At the end of 10 years, they assume the lodge will have to be torn down due to old age and that the property will essentially be worthless. The managers use a WACC approach to project valuation and determine that the appropriate k, for evaluating the investment is 15%. Determine the maximum price the managers of Mountain Top should be willing to pay for the ski lodge. (The maximum price is the amount that will make NPV equal to zero.)