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

Assume that Hope 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 eight-year life.

Requirements

1.Compute the average annual net cash inflow from the expansion

2.Compute the average annual operating income from the expansion.

3.Compute the payback period.

4.Compute the ARR.

Consider how Hape Valify, a popular ski resoct, could use caphal budghting to decide whether the 58.5 Assume that Hope Valioy uses the straipht Ine depreclatisn enetiod and axpects the lodge Tilison Snow Park Lodge enpansion would be a good hivestment expansion to have a reedual value of 5900,000 at the end of ins aightyear ile fif: (Cick the icon to view the exparaion extimates) Resid the recoletimants Fist entar the formis, than compute the average annual net cath wiffor froen the axpandion. (Roound your answer to the neariast dolar.) Data table Requirements 1. Compute the average annual net cash inflow from the expansion. 2. Compute the average annual operating income from the expansion. 3. Compute the payback period. 4. Compute the ARR