Consider how Cole Valley Waterfall Park Lodge could use capital budgeting to decide whether the $12,500,000 Waterfall Park Lodge expansion would be a good investment. Assume Cole Valley's managers developed the following estimates concerning the expansion: (Click the icon to view the estimates.) (Click the icon to view additional information.) The internal rate of retum (IRR) of the expansion is Data T The project is since it will eam a retum than the company's 10% hurdle rate. More Info - X Number Average allow sk Useful li Average Average Cost of a Assume that Cole Valley uses the straight-line depreciation method and expects the lodge expansion to have no residual value at the end of its eleven-year life. The project is expected to have an average annual net cash inflow of $2,632,032, The NPV of the expansion is expected to be $4,595,048. Discount 114 skiers 148 days 11 years Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Cole Valley Useful life of expansion (in years) Average cash spent by each skler per day Average variable cost of serving each skler per day Cost of expansion Discount rate 239 83 12,500,000 10%