DE26-18 Daily Exercises 26-18 through 26-23 consider how Deer Valley Resort (from the chapter opening story) could use capital budgeting methods to decide whether the $13 mil- lion Snow Park Lodge expansion would be a good investment. Assume that Deer Valley's managers developed the following estimates concerning the expansion (all numbers assumed): Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Deer Valley Useful life of expansion (in years).. 100 150 15 5245 Average variable cost of serving each skier per day. $85 $13,000,000 Discount rate.... 12% Average cash spent by each skier per day. Cost of expansion..... Assume that Deer Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $1 million at the end of its 15-year life. Compute the average annual net cash inflow from the expansion.