Consider how Bear Valley, a popular ski resort, could use capital budgeting to decide whether the $8 million River Park Lodge expansion would be a good investment. (Click the icon to view the expansion estimates.) (Click the icon to view the present value annuity factor table.) (Click the icon to view the present value factor table.) (Click the icon to view the future value annuity factor table.) 5 (Click the icon to view the future value factor table.) Read the requirements. ... Requirement 1. What is the project's NPV? Is the investment attractive? Why or why not? Calculate the net present value of the expansion. (Round your answer to the nearest whole dollar. Use parentheses or a minus sign for a negative net present value.) Net present value of expansion - Requirements 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? Print Done Data table t 1. net eses or am Assume that Bear Valley's managers developed the following estimates concerning a planned expansion to its River Park Lodge (all numbers assumed): Jalue Number of additional skiers per day. 120 Average number of days per year that weather conditions allow skiing at Bear Valley 158 Useful life of expansion (in years)... 10 Average cash spent by each skier per day...... $ 238 Average variable cost of serving each skier per day . $ 138 Cost of expansion. $ 8,000,000 Discount rate..... 10% Assume that Bear Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $900,000 at the end of its ten-year life. It has already calculated the average annual net cash inflow per year to be $1,896,000. . Print Done Future Value of Annuity of $1 Present Value of Annuity of $1 18% 0.847 3% 1.000 2.030 Periods Period 1 Period 2 Period 3 Period 4 Period 5 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 1.000 2.010 3.030 4.060 5.101 1% 0.990 1.970 2.941 3.902 4.853 2% 1.000 2.020 3.060 4.122 5.204 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.690 1.647 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 2.322 2.246 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2.798 4.713 4.580 4.452 4.3294212 3.993 3.791 3.605 3.433 3.274 20% 0.833 1.528 2.106 2.589 2.991 4% 1.000 2.040 3.122 4.246 5.416 5% 1.000 2.050 3.153 4.310 5.526 6% 1.000 2.060 3.184 4.375 5.637 8% 1.000 2.080 3.246 4.506 5.867 10% 1.000 2.100 3.310 4.641 6.105 12% 1.000 2.120 3.374 4.779 6.353 14% 1.000 2.140 3.440 4.921 6.610 1.605 16% 1.000 2.160 3.506 5.066 6.877 1.566 18% 1.000 2.180 3.572 5.215 7.154 3.091 20% 1.000 2.200 3.640 5.368 7.442 2.174 2.690 3.127 4.184 5.309 Period 6 5.795 Period 7 6.728 Period 8 7.652 Period 9 8.566 Period 10 9.471 5.601 5.417 5.242 5.0764.917 4.623 4.355 4.111 3.889 3.685 6.472 6.230 6.002 5.786 5.582 5.206 4.868 4.564 4.288 4.039 7.3257.020 6.733 6.463 6.210 5.747 5.335 4.968 4.639 4.344 8.1627.786 7.435 7.108 6.802 6.247 5.759 5.328 4.946 4.607 8.983 8.530 8.111 7.722 7.360 6.710 6.145 5.650 5.216 4.833 3.498 3.812 4.078 4.303 4.494 3.326 3.605 3.837 4.031 4.192 Period 6 Period 7 Period 8 Period 9 Period 10 6.152 6.308 6.468 6.633 6.802 6.975 7.214 7.434 7.662 7.898 8.142 8.394 8.286 8.583 8.892 9.214 9.549 9.897 9.369 9.755 10.159 10.583 11.027 11.491 10.462 10.950 11.464 12.006 12.578 13.181 7.336 7.716 8.115 8.923 9.487 10.089 10.637 11.436 12.300 12.488 13.579 14.776 14.48715.937 17.549 8.536 10.730 13.233 16.085 19.337 8.977 11.414 14.240 17.519 21.321 9.442 12.142 15.327 19.086 23.521 9.930 12.916 16.499 20.799 25.959 Period 11 10.368 9.787 9.253 8.760 8.306 7.887 7.139 6.495 5.938 5.453 Period 12 11.255 10.575 9.9549.385 8.863 8.384 7.536 6.814 6.194 5.660 Period 13 | 12.134 11.348 10.635 9.986 9.3948.853 7.904 7.103 6.424 5.842 Period 1413.004 12.106 11.296 10.563 9.899 9.295 8.244 7.3676.628 6.002 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.606 6.811 6.142 5.029 5.197 5.342 5.468 5.575 4.656 4.793 4.910 5.008 5.092 4.327 4.439 4.533 4.611 4.675 Period 11 Period 12 Period 13 Period 14 Period 15 11.567 12.169 12.808 13.486 14.207 14.972 16.645 18.531 20.655 23.045 25.733 28.755 32.150 12.683 13.412 14.192 15.026 15.917 16.870 18.977 21.384 24.133 27.271 30.850 34.931 39.581 13.809 14.680 15.618 | 16.627 17.713 18.882 21.495 24.523 28.029 32.089 36.786 42.219 48.497 14.94715.974 17.086 18.292 19.599 21.015 24.21527.975 32.393 37.581 43.672 50.818 59.196 16.097 17.29318.599 20.024 21.579 23.276 27.152 31.772 37.280 43.842 51.660 60.965 72.035 22.019 24.297 26.870 29.778 33.066 36.786 45.762 57.275 72.052 91.025 115.380 146.628186.688 28.243 32.03036.459 41.646 47.727 54.865 73.106 98.347 133.334 181.871 249.214 342.603 471.981 34.785 40.568 47.575 56.085 | 66.43979.058 113.283 164.494 241.333 356.787 530.312 790.948 1,181.882 48.886 60.402 75.401 95.026 120.800 154.762 259.057 442.593 767.091 1,342.025 2,360.757 4,163.213 7,343.858 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.5147.469 6.623 5.929 Period 25 22.023 19.52317.413 15.622 14.094 12.783 10.675 9.077 7.843 6.873 6.097 Period 30 25.808 22.396 19.600 17.292 15.372 13.765 11.2589.4278.055 7.003 6.177 Period 40 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 8.244 7.105 6.233 5.353 5.467 5.517 5.548 4.870 4.948 4.979 4.997 Period 20 Period 25 Period 30 Period 40 Print Done - Reference Reference Present Value of $1 Future Value of $1 12% 14% Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 0.990 0.980 0.971 0.961 0.951 18% 0.847 0.718 0.609 0.516 0.437 20% 0.833 0.694 0.579 0.482 0.402 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 1.010 1.020 1.030 1.041 1.051 2% 1.020 1.040 1.061 1.082 1.104 3% 1.030 1.061 1.093 1.126 1.159 4% 1.040 1.082 1.125 1.170 1.217 5% 1.050 1.103 1.158 1.216 1.276 6% 1.060 1.124 1.191 1.262 1.338 8% 1.080 1.166 1.260 1.360 1.469 10% 1.100 1.210 1.331 1.464 1.611 2% 3% 4% 5% 6% 8% 10% 16% 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.961 0.943 0.925 0.907 0.890 0.857 0.826 0.797 0.769 0.743 0.942 0.915 0.889 0.864 0.840 0.794 0.751 0.712 0.675 0.641 0.924 0.888 0.855 0.8230.792 0.735 0.683 0.636 0.592 0.552 0.906 0.863 0.822 0.784 0.747 0.681 0.621 0.567 0.519 0.476 0.888 0.837 0.790 0.746 0.705 0.630 0.564 0.5070.456 0.410 0.871 0.813 0.760 0.711 0.665 0.583 0.513 0.452 0.400 0.354 0.853 0.789 0.731 0.677 0.627 0.540 0.467 0.404 0.351 0.305 0.837 0.766 0.703 0.6450.592 0.500 0.424 0.361 0.308 0.263 0.820 0.744 0.676 0.614 0.558 0.463 0.386 0.322 0.270 0.227 12% 1.120 1.254 1.405 1.574 1.762 14% 1.140 1.300 1.482 1.689 1.925 16% 1.160 1.346 1.561 1.811 2.100 18% 1.180 1.392 1.643 1.939 2.288 20% 1.200 1.440 1.728 2.074 2.488 Period 6 0.942 Period 7 0.933 Period 8 0.923 Period 9 0.914 Period 10 0.905 0.370 0.335 0.314 0.279 0.266 0.233 0.225 0.194 0.191 0.162 Period 6 Period 7 Period 8 Period 9 Period 10 1.062 1.072 1.083 1.094 1.105 1.126 1.149 1.172 1.195 1.219 1.194 1.230 1.267 1.305 1.344 1.265 1.316 1.369 1.423 1.480 1.340 1.407 1.477 1.551 1.629 1.419 1.504 1.594 1.689 1.791 1.587 1.714 1.851 1.999 2.159 1.772 1.949 2.144 2.358 2.594 1.974 2.211 2.476 2.773 3.106 2.195 2.502 2.853 3.252 3.707 2.436 2.826 3.278 3.803 4.411 2.700 3.185 3.759 4.435 5.234 2.986 3.583 4.300 5.160 6.192 0.162 0.135 0.137 0.112 0.116 0.093 0.099 0.078 0.084 0.065 Period 11 Period 12 Period 13 Period 14 Period 15 1.116 1.127 1.138 1.149 1.161 1.243 1.268 1.294 1.319 1.346 1.384 1.426 1.469 1.513 1.558 1.539 1.601 1.665 1.732 1.801 Period 110.896 0.804 0.722 0.650 0.585 0.527 0.429 0.350 0.287 0.237 0.195 Period 120.887 0.788 0.701 0.625 0.557 0.497 0.397 0.319 0.257 0.2080.168 Period 13 0.879 0.773 0.681 0.601 0.530 0.469 0.368 0.290 0.229 0.182 0.145 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 0.340 0.263 0.205 0.160 0.125 Period 15 0.861 0.743 0.642 0.555 0.481 0.417 0.315 0.2390.183 0.140 0.108 Period 20 0.820 0.673 0.554 0.456 0.377 0.312 0.215 0.149 0.104 0.073 0.051 Period 25 0.780 0.610 0.478 0.375 0.295 0.233 0.146 0.092 0.059 0.038 0.024 Period 30 0.742 0.552 0.412 0.308 0.231 0.174 0.099 0.057 0.033 0.020 0.012 Period 40 0.672 0.453 0.307 0.208 0.142 0.097 0.046 0.022 0.011 0.005 1.710 1.796 1.886 1.980 2.079 1.898 2.332 2.853 3.479 4.226 5.117 6.176 7.430 2.012 2.518 3.138 3.896 4.818 5.936 7.288 8.916 2.133 2.720 3.452 4.363 5.492 6.886 8.599 10.699 2.261 2.937 3.797 4.887 6.261 7.988 10.147 12.839 2.397 3.172 4.177 5.474 7.138 9.266 11.974 15.407 3.207 4.661 6.727 9.646 13.743 19.461 27.393 38.338 4.292 6.848 10.835 17.000 26.462 40.874 62.669 95.396 5.743 10.06317.449 29.960 50.950 85.850 143.371 237.376 10.286 21.725 45.259 93.051 188.884 378.721 750.3781,469.772 0.037 0.026 0.0160.010 0.007 0.004 0.001 0.001 Period 20 Period 25 Period 30 Period 40 1.220 1.282 1.348 1.489 1.486 1.641 1.811 2.208 1.806 2.094 2.427 3.262 2.191 2.666 3.243 4.801 2.653 3.386 4.322 7.040 0.003 Print Done Print Done