Consider how Hope Valley, a popular ski resort, could use capital budgeting to decide whether the $8.5 million Snow 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. 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 $ Is the investment attractive? Why? The expansion is project because its NPV is V. Requirement 2. Assume the expansion has no residual value. What is the project's NPV? Is the investment still attractive? Why or why not? Calculate the project's NPV. (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 $ Assume that Hope Valley's managers developed the following estimates concerning a planned expansion to its Snow Park Lodge (all numbers assumed): Number of additional skiers per day......... 120 Average number of days per year that weather conditions allow skiing at Hope Valley ..... 159 Useful life of expansion (in years). ............. Average cash spent by each skier per day ............ 237 Average variable cost of serving each skier per day ... $ 135 Cost of expansion........ .........$ 8,500,000 Discount rate ............................... 10% Assume that Hope Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $750,000 at the end of its nine-year life. It has already calculated the average annual net cash inflow per year to be $1,946,160. Present Value of $1 | Periods| 1% | 2% | 3% | 4% | 5% | 6% 8% 10% 12% | 14% 1 16% | 18% | 20%] 1 10.990 | 0.980 | 0.971 | 0.962 | 0.952 | 0.943 10.926 0.909 10.893 10.877 10.862 10.847 | 0.833 2 10.980 10.961 | 0.943 10.925 10.907 | 0.890 10.857 10.826 | 0.797 10.769 | 0.743 | 0.718 10.694 3 10.971| 0.942 10.915 | 0.889 10864 | 0.840 | 0.794 10.751| 0.712 | 0675 | 064110609 10.579 4 10.961 | 0.924 10.888 | 0.855 10823 | 0.792 | 0.735 10.683 | 0636 10.592 10.552 10.516 10.482 0.951 0.906 10.863 10.822 0.784 10.747 | 0.681 || 10.621 10.567 10.519 10.476 | 0.437 10.402 0.942 | 0.888 | 0.837 | 0.790 0.746 10.705 | 0.630 10.564 10.507 10.456 10.410 | 0.370 10.335 7 10.933 | 087110813 | 0.760 | 0. 71| 0665 | 0.583 10.5131 0.452 | 0.400 10.354 | 0.314 10.279 10.923 | 0.853 10.789 10.731 | 0.677 10.627 | 0.540 | 0.467 | 0.404 | 0.351 10.305 | 0.266 0.233 0.914 | 10.837 | 0.766 10.703 0.645 10.592 | 10.500 10.424 10.361 10.308 0.263 0.225 0.194 0.905 | 0.820 | 0.744 10.676 0614 10.558 10.386 10.270 0.227 | 0.191 0.162 10.896 10.804 | 0.722 10.650 10.585 10.527 10.429 | 10.350 10.287 | 10.237 10.195 0.162 10.135 10.887 10.788 || 0.701 | 0.625 | 0.557 10.497 | 0.397 | 0.319 10.257 10.208 | 10.168 10.137 10.112 10.879 | 0.773 | 0.6811 0.601 10.530 10.469 | 0.368 | 0.290 | 0.229 | 0.182 10.145 | 0.116 10.093 0.870 | 0.758 | 0.6611 0.577 10.505 | 0.442 | 0.340 | 0.263 | 10.205 | 0.160 0.125 | 0.099 0.078 0.8611 0.743 || 0.642 | 0.555 10.481 | 0.417 | 0.315 | 0.239 || | 0.183 | 0.140 10.108 | 0.084 10.065 0820 | 0.673 | 0.554 | 0.456 10.377 | 0.312 | 0215| 0.149 | 0.104 | 0.073 | 0.051 | 0.037 10.026 0.780 | 0.610 | 0.478 | 0.375 10.295 | 0.233 | 0.146 | 0.092 | 0.059 10.038 | 0.024 | 0.016 | 0.010 | | 0.742 | 0.552 10412 10.308 10.231| 0.174 10.099 10.057 | 0.033 10.020 10.012 1 | 0.007 | 0.004 0.672 | 0.453 | 0.307 | 0.208 | 0.142 | 0.097 | 0.046 | 0022 | 0011 | 0.005 | 0.003 | 0.001 | 0.001 0.463 10.322 4567890HQB4688 Future Value of $1 Periods 1% 4% 1.010 1.020 1.030 1.040 1.082 1.125 1.041 1.170 oos voor own- 3% 1.030 1.061 1.093 1.126 1.159 1.194 1.230 1.267 1.305 1.344 1.217 10% 1.100 1.210 1.331 1.464 1.611 1.772 5% 1.050 1.103 1.158 1.216 1.276 1.340 1.407 1.477 1.551 1.629 2% 1.020 1.040 1.061 1.082 1.104 1.126 1.149 1.172 1.195 1.219 1.243 1.268 1.294 1.319 1.346 1.486 1.641 1.811 2.208 6% 1.060 1.124 1.191 1.262 1.338 1.419 1.504 1.594 1.689 1.791 8% 1.080 1.166 1.260 1.360 1.469 1.587 1.714 1.851 1.999 2.159 2.332 1.051 1.062 1.072 1.083 1.094 1.105 1.116 1.127 1.138 1.149 1.161 1.220 1.949 1.265 1.316 1.369 1.423 1.480 12% 1.120 1.254 1.405 1.574 1.762 1.974 2.211 2.476 2.773 3.106 3.479 3.896 4.363 4.887 5.474 9.646 17.000 29.960 93.051 14% 1.140 1.300 1.482 1.689 1.925 2.195 2.502 2.853 3.252 3.707 4.226 4.818 5.492 6.261 7.138 13.743 26.462 50.950 188.884 18% 1.180 1.392 1.643 1.939 2.288 2.700 3.185 3.759 4.435 5.234 6.176 16% 1.160 1.346 1.561 1.811 2.100 2.436 2.826 3.278 3.803 4.411 5.117 5.936 6.886 7.988 9.266 19.461 40.874 85.850 378.721 20% 1.200 1.440 1.728 2.074 2.488 2.986 3.583 4.300 5.160 6.192 7.430 8.916 10.699 12.839 15.407 38.338 95.396 237.376 1,469.772 2.518 7.288 a 1.384 1.426 1.469 1.513 1.558 1.806 2.094 2.427 3.262 2.144 2.358 2.594 2.853 3.138 3.452 3.797 4.177 6.727 10.835 17.449 45.259 1.539 1.601 1.665 1.732 1.801 2.191 2.666 3.243 4.801 1.710 1.796 1.886 1.980 2.079 2.653 3.386 4.322 7.040 1.898 2.012 2.133 2.261 2.397 3.207 4.292 5.743 10.286 2.720 2.937 3.172 4.661 6.848 10.063 21.725 8.599 10.147 11.974 27.393 62.669 143.371 750.378 1.282 1.348 1.489 Present Value of Annuity of $1 | Periods| 1% | 2% | 3% 4% 5% | 6% 8% 10% 12% | 14% 16% | 18% | 20%] 1 10.990 10.980 | 0.971 10.962 10.952 10.943 10.926 10.909 10.893 10.877 | 0.862 10.847 10.833 | 1970 | 1.942 | 1.913 11.886 1.859 | 1.833 | 1.783 11.736 | 1.690 | 1.647 | 1.605 | 1.528 | 2.941 | 2884 | 2.829 | 2.775| 2.723 | 2673 | 2.577 | 2.487 | 2.402 | 2.322 | 2.246 | 2.174 | 2.106 | 3.902 | 3.808 | 3. 77] 3.630 | 3.546 | 3.465 | 3.312 | 3.170 | 3.037 | 2.914 | 2.798 | 2.690 | 2589 4.853 | 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 3.433 3.274 3.127 2.991 5.795 | 5.601 15.417 5.242 5.076 14.917 4.623 4.355 4.111 3.889 3.685 3.498 3.326 6.728 | 6.472 6.230 6.002 5.786 5582 4.868 | 4.564 4.288 | | 4.039 3.812 3.605 7652 | 7.325 7.020 16.733 6.463 6.210 5.747 15.335 4.968 4.639 14.344 4.078 3.837 8.566 18.162 | 7.786 | 7.435 7.108 16.802 6.247 | 5.759 15.328 4.946 | 4.607 14.303 | 4.031 9.47118.983 | 8.530 | 8.111 7722 7.360 6.710 6.145 15.650 14.833 4.494 14.192 10.368| 9.787 19.253 | 8.760 18.306 17.887 7.139 15.453 | 5.029 14.656 | 4.327 12 11.255 | 10.575] 9.954 | 19.385 18.863 8.384 17.536 6814 | 6.1941 15.660 15.197 4.793 4.439 13 12.134 | 11.348 | 10.635] 9.986 19.394 | 8853 | 7.904 17.103 | 6.424 | 5.842 | 5.342 | 4.910 4.533 13.004 | 12.106 | 11.296 | 10.563 | 9899 | 9.295 18.244 | 7.36716628 16.002 | 5.468 5.008 4.611 13.865| 12849| 11.938| 11.118 10.380 19.712 8.559 17.606 | 6.811 6.142 15.575 5.092 14.675 18.046| 16.351114.877 | 13.590 | 12.462 | 11.470 | 9818 | | 8.514 | 7.469 6.623 15.929 5.353 | 4.870 22.0231 19.523117413115.622114.094 | 12.7831 10.675] 9.077 17.843 16.87316.097 15.467 14.948 25.808| 22.396 | 19.600 17.292 | 15.372 | 13.76511.258] 9.427 18.05517.003 16.177 | 5.57 | 4.979 32.835| 27.355| 23.115| 19.793| 17.159| 15.046| 11.925] 9.779 | 8.244 | 7.105 | 6.233 | 5.548 | 4.997 45 6789 5.206 5.216 AU 6495 468 Periods 2% 5% 16% 18% > 0 - 1.000 2.020 3.060 4.122 5.204 6.308 3% 1.000 2.030 3.091 4.184 5.309 4% 1.000 2.040 3.122 4.246 5.416 14% 1.000 2.140 3.440 4.921 6.610 20% 1.000 2.200 3.640 5.368 7.442 6.468 7.434 6 o p = 0 1% 1.000 2.010 3.030 4.060 5.101 6.152 7.214 8.286 9.369 10.462 11.567 12.683 13.809 14.947 16.097 22.019 28.243 34.785 48.886 8.583 9.755 10.950 7.662 8.892 10.159 11.464 6.633 7.898 9.214 10.583 12.006 Future Value of Annuity of $1 6% 8% 10% 1.000 1.000 1.000 1.000 2.050 2.060 2.080 2.100 3.153 3.184 3.246 3.310 4.310 4.375 4.506 4.641 5.526 5.637 5.867 6.105 6.802 6.975 7.336 7.716 8.142 8.394 8.923 9.487 9.549 9.897 10.637 11.436 11.027 11.491 12.488 13.579 12.578 13.181 14.487 15.937 14.207 14.972 16.645 18.531 15.917 16.870 18.977 21.384 17.713 18.882 21.495 24.523 19.599 21.015 24.215 27.975 21.579 23.276 27.152 31.772 33.066 36.786 45.762 57.275 47.727 54.865 73.106 98.347 66.439 79.058 113.283 164.494 120.800 154.762 259.057442.593 12% 1.000 2.120 3.374 4.779 6.353 8.115 10.089 12.300 14.776 17.549 20.655 24.133 28.029 32.393 37.280 72.052 133.334 241.333 767.091 8.536 10.730 13.233 16.085 19.337 23.045 27.271 32.089 37.581 43.842 1.000 2.160 3.506 5.066 6.877 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 1.000 2.180 3.572 5.215 7.154 9.442 12.142 15.327 19.086 23.521 28.755 34.931 42.219 50.818 60.965 s s = 12.169 13.412 14.680 15.974 17.293 24.297 32.030 40.568 60.402 12.808 14.192 15.618 17.086 18.599 26.870 36.459 47.575 75.401 13.486 15.026 16.627 18.292 20.024 9.930 12.916 16.499 20.799 25.959 32.150 39.581 48.497 59.196 72.035 186.688 471.981 1,181.882 7,343.858 s8 9 8 29.778 41.646 56.085 95.026 91.025 181.871 356.787 1,342.025 146.628 342.603 790.948 4,163.213