1.	What is the project's NPV? Is the investment attractive? Why or why not?
2.	Assume the expansion has no residual value. What is the project's NPV? Is the investment still attractive? Why or why not?

i Data Table Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Clare Valley Useful life of expansion (in years) Average cash spent by each skier per day ......... $ 246 Average variable cost of serving each skier per day ... $ Cost of expansion ........ $ 8,000,000 Discount rate ........ 10% Assume that Clare Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $800,000 at the end of its eight-year life. It has already calculated the average annual net cash inflow per year to be $1,969,722. 144 Print Done