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all my answers i put were incorrect Robertson Resorts is considering whether to expand their Pagosa Springs Lodge. The expansion will create 24 additional rooms
all my answers i put were incorrect
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: Cost of expansion Discount rate Useful life Annual rental income Annual operating expenses $3,560,000 8% 20 $1,400,000 $ 950,000 Robertson uses straight-line depreciation and the lodge expansion will have a residual value of $2,120,000. 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 Net Cash Inflow 3. ARR 4. Payback Period 5 NPV 392,240 450,000 1,198.00% 8.4 years 572,582 $ $Step by Step Solution
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