Consider how Golden Valley, a popular ski resort, could use capital budgeting to decide whether the $ 8.5 million Waterfall Park Lodge expansion would be a good investment.

Consider how Golden Valley, a popular ski resort, could use capital budgeting to decide whether the $8.5 million Waterfall Park Lodge expansion would be a good investment. EEB (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.) Click the icon to view the future value factor table.) Data Table Read the requirements Assume that Golden Valley's managers developed the following estimates conceming a planned expansion to its Waterfall Park Lodge all numbers assumed) 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 125 Number of additional skiers per day Average number of days per year that weather Net present value of expansion $ 163 conditions allow skiing at Golden Valley Is the investment attractive? Why? Useful life of expansion (in years) The expansion is V project because its NPV is 237 Average cash spent by each skier per day Average variable cost of serving each skier per day ...$ 136 Requirement 2. Assume the expansion has no residual value. What is the project's NPV? Is the investment still attractive? Why or why not? S 8,500,000 Cost of expansion. Calculate the projects NPV. (Round your answer to the nearest whole dollar. Use parentheses or a minus sign for a negative net present value.) Discount rate 14% Net present value of expansion $ Assume that Golden Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $500,000 at the end of its eight-year life. It has already calculated the average net cash inflow per year to be $2,057,875. Is the investment attractive? Why? because of the projects NPV Without a residual value, the expansion Print Done