5 E11-14 (Algo) Calculating ARR, Payback Period and NPV (LO 11-1, 11-2, 11-3) 3 points Robertson Resorts is considering whether to expand their Pagosa Springs Lodge. The expansion will create 24 additional rooms for rent. The following estimates are available: 03:09:04 Book Cost of expansion Discount rate Useful life Annual rental income Annual operating expenses $3,380,000 BR 20 $1,700,000 $1,250,000 Print References Robertson uses straight-line depreciation and the lodge expansion will have a residual value of $2,360,000. Required: 1. Calculate the annual net operating Income from the expansion 2. Calculate the annual net cash inflow from the expansion 3. Calculate the ARR. (Round your answer to 2 decimal places.) 4. Calculate the payback period. (Round your answer to 1 decimal place.) 5. Calculate the NPV (Future Value of $1. Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round your final answer to nearest whole dollar amount.) $ $ 1. Annual Operating Income 2. Annual Not Cash Inflow 3. ARR 4. Payback Period 5 NPV 450,000 501.000 13311% 6.7 years 2,045,226 TABLE 11.1A Future Value of $1 Periods 29 8% 3% 3.75% 4% 4.25% 5% 6% 7% 10000 0 10000 10000 10000 10000 10000 10000 10000 10000 1 10800 10700 10200 10300 10375 10400 10425 10500 10600 2 10764 10404 10609 10816 10868 11025 11236 1.1664 11449 3 10612 10927 11168 1.1249 11330 1.1576 12597 1.1910 12250 4 1.0824 11255 11587 1.1699 11811 12155 12625 13605 13108 11041 11593 on 12021 12167 12313 12763 13382 14026 14693 6 1.1262 11941 1.2472 12653 12837 13401 14185 15007 1.5869 7 11487 12299 12939 13159 13382 1.4071 15036 16058 17138 8 11717 12668 13425 13686 13951 14775 15938 17182 1.8509 9 11951 13048 13928 1.4233 14544 1.5513 16895 18385 1.9990 10 12190 13439 1.4450 14802 15162 16289 17906 1.9672 21589 20 14859 18061 20882 21911 2 2989 26533 32071 3.8697 4.6610 Periods 9% 10% 11% 12% 13% 14% 15% 20% 25% 0 1.0000 1.0000 10000 1 10000 10000 10000 10000 10000 10000 10900 1.1000 1.1100 11200 11300 11400 1.1881 12100 12321 12544 12769 12996 11500 12000 12500 2 13225 14400 1.5625 3 12950 13310 1.3676 14049 14429 14815 15209 17280 1.9531 4 1.4116 1.4641 15181 15735 1.6305 16890 17490 2.0736 2.4414 5 15386 16105 16851 17623 18424 19254 20114 2.4883 3.0518 6 16771 17716 18704 1.9738 2.0820 2 1950 2 3131 2.9860 3.8147 7 1.8280 19487 20762 2.2107 2.3526 25023 26600 3.5832 4.7684 00 19926 2.1436 2 3045 2.4760 2.6584 2.8526 30590 4.2998 5.9605 9 21719 23579 25580 2.7731 3.0040 3.2519 3.5179 5.1598 74506 10 23674 25937 2.8394 3.1058 3.3946 3.7072 4.0456 6 1917 93132 20 5.6044 67275 80623 96463 11.5231 13.7435 16 3665 38 3376 86.7362 TABLE 11.2A Present Value of $1 Periods 2% 3% 3.75% 4% 4.25% 5% 6% 7% 8% 1 2 3 0.9804 0.9709 0.9639 0.9615 0.9592 0.9524 0.9434 0.9346 0.9259 0.9612 0.9426 0.9290 0.9246 0.9201 0.9070 0.8900 0.8734 0.8573 0.9423 0.9151 0.8954 0.8890 08826 0.8638 0.8396 0.8163 07938 0.9238 0.8885 0.8631 0.8548 0.8466 08227 07921 0.762907350 0.9057 08626 0.8319 0.8219 0.8121 07835 07473 0.7130 0.6806 4 5 6 08880 0.8375 0.8018 07903 07790 07462 07050 0.6663 0.6302 7 08706 0.8131 0.7728 0.7599 07473 0.7107 0.6651 0.6227 0.5835 00 0.8535 0.7894 0.7449 0.7307 0.7168 0.6768 0.6274 0.5820 0.5403 9 0.8368 0.7664 0.7180 0.7026 0.6876 06446 0.5919 0.5439 0.5002 10 0.8203 0.7441 0.6920 06756 0.6595 06139 0.5584 0.5083 0.4632 0.6730 0.5537 0.4789 0.4564 0.4350 0.3769 0.3118 0.2584 0 2145 20 Periods 9% 10% 11% 12% 13% 14% 15% 20% 25% 1 0.9174 0.9091 0.9009 0.8929 0.8850 0.8772 0.8696 0.8333 0.8000 2 0.8417 0.8264 0.8116 0.7972 0.7831 0.7695 07561 0.6944 0.6400 0.7118 0.6931 0.6750 0.6575 0.5787 0.5120 3 07722 0.7513 07312 4 07084 0.6830 0.6587 06355 0.6133 05921 0.5718 0.4823 0.4096 5 0.6499 0.6209 0.5935 0.5674 0.5428 0.5194 04972 0 4019 0.3277 6 0.5963 0.5645 0.5346 0,5066 0.4803 04556 0.4323 0.3349 0.2621 7 0.5470 0.5132 0.4817 0.4523 04251 0.3996 0.3759 0.2791 0.2097 8 0.5019 0.4665 0.4339 0.4039 0.3762 03506 0.3269 0.2326 0.1678 9 04604 0.4241 0.3909 0.3606 0.3329 03075 0.2843 0.1938 0.1342 10 0.4224 0.3855 0.3522 0.3220 0.2946 0.2697 0.2472 01615 0.1074 20 0.1784 0.1486 0.1240 0.1037 0.0868 0.0728 0.0611 0.0261 00115 TABLE 11.3A Future Value of an Annuity of $1 Periods 2% 3% 3.75% 4% 4.25% 5% 6% 7% 8% 1 10000 10000 10000 10000 1.0000 10000 10000 10000 10000 2 20200 20300 20375 2.0400 20425 20500 20600 20700 20800 3 3.0604 3.0909 3.1139 3.1216 31293 31525 3.1836 3 2149 3.2464 4 4,1216 4.1836 42307 4.2465 42623 4.3101 4.3746 4.4399 4.5061 5 5 2040 53091 5.3893 5.4163 5.4434 5.5256 5.6371 5.7507 58666 6 6 3061 6.4684 6.5914 6.6330 6.6748 6 8019 6.9753 71533 73359 7 74343 76625 78386 7.8983 79585 8.1420 83938 8.6540 8.9228 8 8.5830 88923 91326 9.2142 9.2967 9.5491 9.8975 10.2598 10.6366 9 97546 10.1591 10.4750 10.5828 106918 110266 11.4913 11.9780 124876 10 10 9497 114639 118678 12 0061 121462 12 5779 13.1808 13 8164 14.4866 20 24 2974 26 8704 29.0174 29.7781 30,5625 33 0660 36.7856 40.9955 45.7620 Periods 9% 10% 11% 12% 13% 14% 15% 20% 25% 1.0000 1.0000 1.0000 10000 10000 1.0000 10000 1.0000 10000 21100 21200 2 2.0900 2.1000 2.1300 2.1400 2.1500 22000 2.2500 3 32781 3.3100 3.3421 3.3744 3.4069 3.4396 3.4725 3.6400 3.8125 4 4.5731 4.6410 47097 4.7793 4.8498 4.9211 4.9934 5.3680 57656 5 5.9847 6.1051 62278 6.3528 6.4803 6.6101 67424 74416 8 2070 6 75233 77156 79129 81152 83227 8.5355 8.7537 99299 112588 7 9.2004 9.4872 97833 10.0890 10.4047 10.7305 110668 12 9159 15.0735 00 11.0285 11.4359 11,8594 12 2997 127573 13 2328 13.7266 16.4991 19.8419 9 130210 13.5975 141640 14.7757 15.4157 16 0853 16.7856 20.7989 25 8023 10 15.1929 15.9374 167220 17.5487 18.4197 19.3373 20.3037 25.9587 33 2529 20 511601 572750 64 2028 72.0524 80.9468 91.0249 102.4436 186.6880 342 9447 TABLE 11.4A Present Value of Annuity of $1 Periods 2% 3% 3.75% 4% 4.25% 5% 6% 7% 8% 1 0.9804 0.9709 0.9639 0.9615 0.9592 0.9524 0.9434 0.9346 0.9259 2 19416 1.9135 18929 18861 1.8794 18594 1.8334 18080 17833 3 28839 28286 27883 2.7751 27620 2.7232 26730 2.6243 25771 4 3.8077 3.7171 36514 3.6299 36086 35460 3.4651 33872 33121 5 4.7135 4.5797 4.4833 4.4518 4.4207 4.3295 4.2124 4.1002 3.9927 6 5 6014 5.4172 5.2851 5.2421 5.1997 5.0757 4.9173 4.7665 4.6229 7 6:4720 6.2303 6.0579 6.0021 5.9470 5.7864 5.5824 53893 5.2064 8 73255 70197 6.8028 6.7327 6.6638 6.4632 6 2098 5.9713 5.7466 9 8.1622 77861 7.5208 74353 73513 71078 6 8017 6.5152 6.2469 10 89826 8.5302 8 2128 8.1109 8.0109 77217 73601 70236 6.7101 20 16.3514 14.8775 13.8962 13.5903 13 2944 12.4622 11.4699 105940 9.8181 Periods 9% 10% 11% 12% 13% 14% 15% 20% 25% 1 0.9174 0.9091 0.9009 0.8929 0.8550 0.8772 0.8696 0.8333 0.8000 2 1.7591 17355 17125 16901 16681 16467 16257 1.5278 14400 3 2.5313 2.4869 2.4437 2.4018 23612 23216 22832 21065 19520 4 32397 3 1699 3.1024 3,0373 2.9745 2.9137 2.8550 25887 23616 5 3.8897 3.7908 3.6959 3.6048 3.5172 3.4331 3.3522 2.9906 2.6893 6 4.4859 4.3553 4.2305 4.1114 3.9975 3.8887 3.7845 33255 2.9514 7 5.0330 4.8684 4.7122 4.5638 4.4226 42883 4.1604 3.6046 3 1611 00 5.5348 5.3349 5:1461 4.967647988 4.6389 4.4873 3.8372 3.3289 9 5.9952 5.7590 5.5370 5.3282 51317 4.9464 4.7716 4.0310 3.4631 10 6.4177 6.1446 5.8892 5.6502 5.4262 5.2161 50188 4.1925 3.5705 20 9.1285 8.5136 79633 7.4694 70248 66231 6.2593 4.8696 3.9539