Consider how Hope Valley, a popular ski resort, could use capital budgeting to decide whether the $8.5 million Spring 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.) (Click the icon to view the future value factor table.) Read the 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? Assume that Hope Valley's managers developed the following estimates concerning a planned expansion to its Spring Park Lodge (all numbers assumed): Number of additional skiers per day.... 119 Average number of days per year that weather conditions allow skiing at Hope Valley.. 163 Useful life of expansion (in years) 8 Average cash spent by each skier per day.... $ 246 Average variable cost of serving each skier per day . $ 138 Cost of expansion.. $ 8,500,000 Discount rate .... 12% Assume that Hope Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $1,000,000 at the end of its eight-year life. It has already calculated the average annual net cash inflow per year to be $2,094,876