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A company is trying to determine which if they should build a new ski resort in Pennsylvania. The cost of the project will be $5,400,000.
A company is trying to determine which if they should build a new ski resort in Pennsylvania. The cost of the project will be $5,400,000. The company has been making projections regarding their sales forecast annually starting 1 year after they complete the investment. The company knows they will have fixed cost every year of $895,000 that will go up at their projects inflation rate of 3%. Based on the expected sales projections below, what is the Expected NPV of the project for a project with an 8-year life and 20% required return based on the high risk of climate change. Sales per Sales per Sales Projection Strong - 15% Medium- 60% day in Days of Good Good Weather Weather $ 55 45,000 $ 35 45,000 $ 25 45,000 Days of Fair day in Fair Weather Weather $ 20 15,000 $ 20 15,000 $ 10 15,000 Weak-25% A company is trying to determine which if they should build a new ski resort in Pennsylvania. The cost of the project will be $5,400,000. The company has been making projections regarding their sales forecast annually starting 1 year after they complete the investment. The company knows they will have fixed cost every year of $895,000 that will go up at their projects inflation rate of 3%. Based on the expected sales projections below, what is the Expected NPV of the project for a project with an 8-year life and 20% required return based on the high risk of climate change. Sales per Sales per Sales Projection Strong - 15% Medium- 60% day in Days of Good Good Weather Weather $ 55 45,000 $ 35 45,000 $ 25 45,000 Days of Fair day in Fair Weather Weather $ 20 15,000 $ 20 15,000 $ 10 15,000 Weak-25%
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