All tables in blue boxes are included.

The internal rate of return of the expansion is between----------------- Options (10% and 12% )or (12% and 14) or (14% and 16%) or (18% and 20%) or (16%and 18%)

The project is------------------(attractive or not attractive) since it will earn a------------------(higher or lower) return than the company's 10% hurdle rate.

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Consider how Bear Valley, a popular ski resort, could use capital budgeting to decide whether the $9.5 million Spring Park Lodge expansion would be a good investment. (Click the icon to view the expansion estimates.) Assume that Bear Valley uses the straight-line depreciation method and expects the lodge expansion to have no residual value at the end of its 9-year life. They have already calculated the average annual net cash inflow per year to be $2,114,382. Requirement What is the project's IRR? Is the investment attractive? Why or why not? E (Click the icon to view the present value annuity table.) More Info E: (Click the icon to view the present value table.) E (Click the icon to view the future value annuity table.) (Click the icon to view the future value table.) The internal rate of return of the expansion is between Assume that Bear Valley's managers developed the following estimates concerning a planned expansion to its Spring Park Lodge (all numbers assumed): The project is since it will earn a return than the company's 10% hurdle rate 122 159 9 Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Bear Valley Useful life of expansion (in years) Average cash spent by each skier per day Average variable cost of serving each skier per day Cost of expansion Discount rate 247 S 138 $ 9,500,000 10% Click to select your answer(s). Print Done ? Save for Later - X 0 Data Table Data Table y er us Period 8% ? Period 8% 18% 20% ie 1 1.000 1 0.909 0.833 0.926 1.783 0.847 1.566 iel 2 2.080 2 1.528 3 3.246 3 2.577 2.174 2.106 Present Value of Annuity of $1 $1 10% 12% 14% 16% 0.893 0.877 0.862 1.736 1.690 1.647 1.605 2.487 2.402 2.322 2.246 3.170 3.037 2.914 2.798 3.791 3.605 3.433 3.274 4.355 4.111 3.889 3.685 4.868 4.564 4.288 4.039 5.335 4.968 4.639 4.344 4 4.506 4 Future Value of Annuity of $1 10% 12% 14% 16% 18% 20% 1.000 1.000 1.000 1.000 1.000 1.000 2.100 2.120 2.140 2.160 2.180 2.200 3.310 3.374 3.440 3.506 3.572 3.640 4.641 4.779 4.921 5.066 5.215 5.368 6.105 6.353 6.610 6.877 7.154 7.442 7.716 8.115 8.536 8.977 9.442 9.930 9.487 10.089 10.730 11.414 12.142 12.916 11.436 12.300 13.233 14.240 15.327 16.499 13.579 14.776 16.085 17.519 19.086 20.799 15.937 17.549 19.337 21.321 23.521 25.959 2.690 3.312 3.993 2.589 2.991 5 5 3.127 5.867 7.336 6 6 4.623 5.206 3.498 3.812 3.326 3.605 7 8.923 7 8 10.637 8 5.747 4.078 3.837 9 5.759 4.303 12.488 14.487 9 10 6.247 6.710 5.328 5.650 4.946 5.216 4.607 4.833 4.031 4.192 10 6.145 4.494 Print Done Print Done Data Table - X Data Table - X i - Sear icoil Ear cas Future Value of $1 12% 14% Present Value of $1 12% 14% ect ico Period 8% 18% 20% Period 10% % 16% 18% 20% 16% 1.160 10% 1.100 1.210 8% 0.926 1 1.080 1.120 1.140 1.180 1.200 1 0.909 0.862 0.847 0.833 ico 0.893 0.797 0.877 0.769 2 1.346 1.392 1.440 2 0.743 1.166 1.260 1.254 1.405 1.300 1.482 0.857 0.794 1.331 1.561 1.643 1.728 3 0.826 0.751 0.683 0.675 3 4 0.712 0.636 0.641 0.552 e oil e 1.360 1.464 1.689 1.939 2.074 4 0.735 0.592 1.574 1.762 1.811 2.100 5 1.469 1.611 1.925 2.288 5 0.681 0.621 0.567 0.519 0.476 2.488 2.986 0.718 0.694 0.609 0.579 0.516 0.482 0.437 0.402 0.370 0.335 0.3140.279 0.266 0.233 0.225 0.194 6 1.587 1.772 1.974 2.195 2.436 6 0.630 0.564 0.507 0.456 0.410 7 7 0.513 0.452 2.211 2.476 2.502 2.853 2.826 3.278 2.700 3.185 3.759 4.435 3.583 4 300 0.400 0.351 8 8 0.583 0.540 0.500 1.714 1.949 1.851 2.144 1.999 2.358 2.159 2.594 0.467 0.404 0.354 0.305 0.263 9 2.773 3.252 3.803 5.160 9 0.424 0.308 0.361 0.322 10 3.106 3.707 4.411 5.234 6.192 10 0.463 0.386 0.270 0.227 0.191 0.162 Print Done Print Done