Consider how Flint Valley, a popular ski resort, could use capital budgeting to decide whether the $8.5 million Brook Park Lodge expansion would be a good investment. (Click the icon to view the expansion estimates.) (Click the icon to view the present value factor table.) (Click the icon to view the present value annuity factor table.) (Click the icon to view the future value annuity factor table.) (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 Print Done Done Reference Present Value of Annuity of $1 Periods 6% | 14% 1% 0.990 1.970 2.941 3.902 4.853 2% 0.980 1.942 2.884 3.808 4.713 3% 0.971 1.913 2.829 3.717 4.580 4% 0.962 1.886 2.775 3.630 4.452 5% 0.952 1.859 2.723 3.546 4.329 0.943 1.833 2.673 3.465 4.212 8% 0.926 1.783 2.577 3.312 3.993 10% 0.909 1.736 2.487 3.170 3.791 12% 0.893 1.690 2.402 3.037 3.605 0.877 1.647 2.322 2.914 3.433 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2.174 2.690 3.127 0.833 1.528 2.106 2.589 2.991 5.242 5.795 6.728 7.652 8.566 9.471 5.601 6.472 7.325 8.162 8.983 5.417 6.230 7.020 7.786 8.530 6.002 6.733 7.435 8.111 5.076 5.786 6.463 7.108 7.722 4.917 5.582 6.210 6.802 7.360 4.623 5.206 5.747 6.247 6.710 4.355 4.868 5.335 5.759 6.145 4.111 4.564 4.968 5.328 5.650 3.889 4.288 4.639 4.946 5.216 3.685 4.039 4.344 4.607 4.833 3.498 3.812 4.078 4.303 4.494 3.326 3.605 3.837 4.031 4.192 8 co o ovo oa w 10.368 11.255 12.134 13.004 13.865 9.787 10.575 11.348 12.106 12.849 9.253 9.954 10.635 11.296 11.938 8.760 9.385 9.986 10.563 11.118 8.306 8.863 9.394 9.899 10.380 7.887 8.384 8.853 9.295 9.712 7.139 7.536 7.904 8.244 8.559 6.495 6.814 7.103 7.367 7.606 5.938 6.194 6.424 6.628 6.811 5.453 5.660 5.842 6.002 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 18.046 22.023 25.808 32.835 16.351 19.523 22.396 27.355 14.877 17.413 19.600 23.115 13.590 15.622 17.292 19.793 12.462 14.094 15.372 17.159 11.470 12.783 13.765 15.046 9.818 10.675 11.258 11.925 8.514 9.077 9.427 9.779 7.469 7.843 8.055 8.244 6.623 6.873 7.003 7.105 5.929 6.097 6.177 6.233 5.353 5.467 5.517 5.548 4.870 4.948 4.979 4.997 Future Value of Annuity of $1 Periods 3% 5% 20% 1.000 2.200 1% 1.000 2.010 3.030 4.060 5.101 2% 1.000 2.020 3.060 4.122 5.204 1.000 2.030 3.091 4.184 5.309 4% 1.000 2.040 3.122 4.246 5.416 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 16% 1.000 2.160 3.506 5.066 6.877 18% 1.000 2.180 3.572 5.215 7.154 3.640 5.368 7.442 M d o o voo own- 6.152 7.214 8.286 9.369 10.462 6.308 7.434 8.583 9.755 10.950 6.468 7.662 8.892 10.159 11.464 6.633 7.898 9.214 10.583 12.006 6.802 8.142 9.549 11.027 12.578 6.975 8.394 9.897 11.491 13.181 7.336 8.923 10.637 12.488 14.487 7.716 9.487 11.436 13.579 15.937 8.115 10.089 12.300 14.776 17.549 8.536 10.730 13.233 16.085 19.337 9.442 12.142 15.327 19.086 23.521 9.930 12.916 16.499 20.799 25.959 11.567 12.683 13.809 14.947 16.097 12.169 13.412 14.680 15.974 12.808 14.192 15.618 17.086 18.599 13.486 15.026 16.627 18.292 20.024 14.207 15.917 17.713 19.599 21.579 14.972 16.870 18.882 21.015 23.276 16.645 18.977 21.495 24.215 27.152 18.531 21.384 24.523 27.975 31.772 20.655 24.133 28.029 32.393 37.280 23.045 27.271 32.089 37.581 43.842 8.977 11.414 14.240 17.519 21.321 25.733 30.850 36.786 43.672 51.660 115.380 249.214 530.312 2,360.757 28.755 34.931 42.219 50.818 60.965 32.150 39.581 48.497 59.196 72.035 17.293 22.019 28.243 34.785 48.886 24.297 32.030 40.568 60.402 26.870 36.459 47.575 75.401 29.778 41.646 56.085 95.026 33.066 47.727 66.439 120.800 36.786 54.865 79.058 154.762 45.762 73.106 113.283 259.057 57.275 98.347 164.494 442.593 72.052 133.334 241.333 767.091 91.025 181.871 356.787 1,342.025 146.628 342.603 790.948 4,163.213 186.688 471.981 1,181.882 7,343.858 Reference Present Value of $1 Periods 5% 8% 14% 16% 18% 1% 0.990 0.980 0.971 0.961 0.951 2% 0.980 0.961 0.942 0.924 0.906 3% 0.971 0.943 0.915 0.888 0.863 4% 0.962 0.925 0.889 0.855 0.822 0.952 0.907 0.864 0.823 0.784 6% 0.943 0.890 0.840 0.792 0.747 0.926 0.857 0.794 0.735 0.681 10% 0.909 0.826 0.751 0.683 0.621 12% 0.893 0.797 0.712 0.636 0.567 0.877 0.769 0.675 0.592 0.519 0.862 0.743 0.641 0.552 0.476 0.847 0.718 0.609 0.516 0.437 20% 0.833 0.694 0.579 0.482 0.402 0.942 0.933 0.923 0.914 0.905 0.888 0.871 0.853 0.837 0.820 0.837 0.813 0.789 0.766 0.744 0.790 0.760 0.731 0.703 0.676 0.746 0.711 0.677 0.645 0.614 0.705 0.665 0.627 0.592 0.558 0.630 0.583 0.540 0.500 0.463 0.564 0.513 0.467 0.424 0.386 0.456 0.400 0.351 0.308 0.270 0.410 0.354 0.305 0.263 0.227 0.370 0.314 0.266 0.225 0.191 0.335 0.279 0.233 0.194 0.162 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.162 0.137 0.896 0.887 0.879 0.870 0.861 0.804 0.788 0.773 0.758 0.743 0.722 0.701 0.681 0.661 0.642 0.650 0.625 0.601 0.577 0.555 0.585 0.557 0.530 0.505 0.481 0.527 0.497 0.469 0.442 0.417 0.429 0.397 0.368 0.340 0.315 0.350 0.319 0.290 0.263 0.239 0.237 0.208 0.182 0.160 0.140 0.195 0.168 0.145 0.125 0.108 0.116 0.099 0.084 0.135 0.112 0.093 0.078 0.065 0.820 0.780 0.742 0.673 0.610 0.552 0.453 0.554 0.478 0.412 0.307 0.456 0.375 0.308 0.208 0.377 0.295 0.231 0.142 0.312 0.233 0.174 0.097 0.215 0.146 0.099 0.046 0.149 0.092 0.057 0.022 0.104 0.059 0.033 0.011 0.073 0.038 0.020 0.005 0.051 0.024 0.012 0.003 0.037 0.016 0.007 0.001 0.026 0.010 0.004 0.001 0.672 Reference Future Value of $1 Periods 3% 5% 8% 1% 1.010 1.020 1.030 1.041 1.051 2% 1.020 1.040 1.061 1.082 1.104 1.030 1.061 1.093 1.126 1.159 4% 1.040 1.082 1.125 1.170 1.217 1.050 1.103 1.158 1.216 1.276 6% 1.060 1.124 1.191 1.262 1.338 1.080 1.166 1.260 1.360 1.469 10% 1.100 1.210 1.331 1.464 1.611 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 2.700 3.185 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 1.340 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 2.195 2.502 2.853 3.252 3.707 Ca o = oovoorawn 2.436 2.826 3.278 3.803 4.411 3.759 2.986 3.583 4.300 5.160 6.192 4.435 5.234 1.480 3.106 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 1.710 1.796 1.886 1.980 2.079 1.898 2.012 2.133 2.261 2.397 2.332 2.518 2.720 2.937 3.172 2.853 3.138 3.452 3.797 4.177 3.479 3.896 4.363 4.887 5.474 4.226 4.818 5.492 6.261 7.138 5.117 5.936 6.886 7.988 9.266 19.461 40.874 85.850 378.721 6.176 7.288 8.599 10.147 11.974 7.430 8.916 10.699 12.839 15.407 1.220 1.806 2.094 1.282 1.486 1.641 1.811 2.208 2.191 2.666 3.243 4.801 2.653 3.386 4.322 7.040 3.207 4.292 5.743 10.286 4.661 6.848 10.063 21.725 6.727 10.835 17.449 45.259 9.646 17.000 29.960 93.051 13.743 26.462 50.950 188.884 27.393 62.669 143.371 750.378 38.338 95.396 237.376 1,469.772 2.427 1.348 1.489 3.262 Assume that Flint Valley's managers developed the following estimates concerning a planned expansion to its Brook Park Lodge (all numbers assumed): Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Flint Valley ........... Useful life of expansion (in years) Average cash spent by each skier per day .......... 140 Average variable cost of serving each skier per day ...... $ Cost of expansion ............ $ 8,500,000 Discount rate 12% ................................. Assume that Flint Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $800,000 at the end of its nine-year life. It has already calculated the average annual net cash inflow per year to be $1,983,842