Consider how Hunter Valley Snow Park Lodge could use capital budgeting to decide whether the $11,000,000 Snow Park Lodge expansion would be a good investment. Assume Hunter Valley's managers developed the following estimates concerning the expansion: (Click the icon to view the estimates.) (Click the icon to view additional information.) (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) What is the project's NPV (round to nearest dollar)? Is the investment attractive? Why or why not? Calculate the net present value of the expansion. (Enter any factor amounts to three decimal places, X.XXX. Round to the nearest whole dollar.) Net Cash PV Factor Present Annuity PV Factor (i=10%, n=7) Years Inflow (i=10%, n=7) Value 1-7 Present value of annuity Present value of residual value Total PV of cash inflows 0 Initial investment Net present value of expansion Data Table x More Info 121 skiers Assume that Hunter Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $600,000 at the end of its seven-year life. They have already calculated the average annual net cash inflow per year to be $2,714,756 Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Hunter Valley Useful life of expansion (in years) Average cash spent by each skier per day Average variable cost of serving each skier per day Cost of expansion Discount rate 142 days 7 years 241 Print Done 83 11,000,000 10% En Print Done Present Value of $1 Periods Periods 1 1 2 3 4 5 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 5% 0.952 0.907 0.864 0.823 0.784 6% 0.943 0.890 0.840 0.792 0.747 7% 0.935 0.873 0.816 0.763 0.713 8% 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 14% 0.877 0.769 0.675 0.592 0.519 15% 0.870 0.756 0.658 0.572 0.497 16% 0.862 0.743 0.641 0.552 0.476 9% 0.917 0.842 0.772 0.708 0.650 0.596 0.547 0.502 0.460 0.422 18% 0.847 0.718 0.609 0.516 0.437 20% 0.833 0.694 0.579 0.482 0.402 2 3 4 5 12% 0.893 1.690 2.402 3.037 3.605 14% 0.877 1.647 2.322 2.914 3.433 16% 0.862 1.605 2.246 2.798 3.274 15% 0.870 1.626 2.283 2.855 3.352 3.784 4.160 4.487 4.772 5.019 18% 0.847 1.566 2.174 2.690 3.127 20% 0.833 1.528 2.106 2.589 2.991 6 7 8 9 10 0.888 0.871 0.853 0.837 0.820 0.837 0.813 0.789 0.766 0.744 0.746 0.711 0.677 0.645 0.614 0.705 0.665 0.627 0.592 0.558 0.666 0.623 0.582 0.544 0.508 0.630 0.583 0.540 0.500 0.463 0.564 0.513 0.467 0.424 0.386 0.507 0.452 0.404 0.361 0.322 0.456 0.432 0.400 0.376 0.351 0.327 0.308 0.284 0.270 0.247 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 6 7 8 9 10 Present Value of Ordinary Annuity of $1 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.103 13.004 | 12.106 | 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.022 16.398 14.992 13.754 12.659 12.659 11.690 10.828 10.059 9.372 8.756 8.201 17.226 15.678 14.32413.134 13.134 | 12.085 | 11.158 10.336 9.604 8.950 8.365 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.129 8.514 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 0.942 0.933 0.923 0.914 0.905 0.896 0.887 0.879 0.870 0.861 0.790 0.760 0.731 0.703 0.676 0.650 0.625 0.601 0.577 0.555 11 12 13 14 15 0.804 0.788 0.773 0.758 0.743 0.722 0.701 0.681 0.661 0.642 0.585 0.557 0.530 0.505 0.481 0.527 0.497 0.469 0.442 0.417 0.475 0.444 0.415 0.388 0.362 0.429 0.397 0.368 0.340 0.315 0.388 0.356 0.326 0.299 0.275 0.350 0.319 0.290 0.263 0.239 0.287 0.257 0.229 0.205 0.183 0.237 0.208 0.182 0.160 0.140 0.195 0.168 0.145 0.125 0.108 0.162 0.137 0.116 0.099 0.084 0.135 0.112 0.093 0.078 0.065 11 12 13 14 15 5.938 6.194 6.424 6.628 6.811 5.453 5.660 5.842 6.002 6.142 5.234 5.421 5.583 5.724 5.847 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 0.215 0.187 0.163 0.141 0.123 0.107 0.093 0.081 0.070 0.061 16 17 18 19 20 0.853 0.844 0.836 0.828 0.820 0.728 0.714 0.700 0.686 0.673 0.623 0.605 0.587 0.570 0.554 0.534 0.513 0.494 0.475 0.456 0.458 0.436 0.416 0.396 0.377 0.394 0.371 0.350 0.331 0.312 0.339 0.317 0.296 0.277 0.258 0.292 0.270 0.250 0.232 0.215 0.252 0.231 0.212 0.194 0.178 0.218 0.198 0.180 0.164 0.149 0.163 0.146 0.130 0.116 0.104 0.123 0.108 0.095 0.083 0.073 0.093 0.080 0.069 0.060 0.051 0.071 0.060 0.051 0.043 0.037 0.054 0.045 0.038 0.031 0.026 16 17 18 19 20 6.974 7.120 7.250 7.366 7.469 6.265 6.373 6.467 6.550 6.623 5.954 6.047 6.128 6.198 6.259 5.669 5.749 5.818 5.877 5.929 5.162 5.222 5.273 5.316 5.353 4.730 4.775 4.812 4.844 4.870 21 22 23 24 25 0.811 0.803 0.795 0.788 0.780 0.660 0.647 0.634 0.622 0.610 0.538 0.522 0.507 0.492 0.478 0.439 0.422 0.406 0.390 0.375 0.359 0.342 0.326 0.310 0.295 0.294 0.278 0.262 0.247 0.233 0.242 0.226 0.211 0.197 0.184 0.199 0.184 0.170 0.158 0.146 0.164 0.150 0.138 0.126 0.116 0.135 0.123 0.112 0.102 0.092 0.093 0.064 0.083 0.056 0.074 0.049 0.066 0.043 0.059 0.038 0.053 0.046 0.040 0.035 0.030 0.044 0.038 0.033 0.028 0.024 0.031 0.026 0.022 0.019 0.016 0.022 0.018 0.015 0.013 0.010 21 22 23 24 25 7.562 7.645 7.718 7.784 7.843 6.687 6.743 6.792 6.835 6.873 6.312 6.359 6.399 6.434 6.464 5.973 6.011 6.044 6.073 6.097 5.384 5.410 5.432 5.451 5.467 4.891 4.909 4.925 4.937 4.948 18.857 17.011 15.415 14.029 12.821 11.764 10.836 10.017 9.292 8.649 19.660 17.658 15.937 14.451 13.163 12.042 11.061 10.201 9.442 8.772 20.456 18.292 16.444 14.857 13.489 12.303 11.272 10.371 9.580 8.883 21.243 18.914 16.936 15 247 13.799 12.550 11.469 | 10.529 9.707 8.985 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 22.795 20.121 | 17.877 15.983 14.375 13.003 11.826 10.810 9.929 9.161 23.560 20.707 18.327 16.330 14.643 13.211 11.987 11.987 | 10.935 | 10.027 9.237 24.316 21.28118.764 16.663 14.898 13.406 12.137 11.051 11.051 10.116 9.307 25.066 21.844 19.188 16.984 15.141 13.591 | 12.278 11.158 10.198 9.370 25.808 22.396 | 19.600 17.292 15.372 | 13.765 12.409 11.258 10.274 9.427 26 27 28 29 30 0.772 0.764 0.757 0.749 0.742 0.598 0.586 0.574 0.563 0.552 0.464 0.450 0.437 0.424 0.412 0.361 0.347 0.333 0.321 0.308 0.281 0.268 0.255 0.243 0.231 0.220 0.207 0.196 0.185 0.174 0.172 0.161 0.150 0.141 0.131 0.135 0.125 0.116 0.107 0.099 0.106 0.098 0.090 0.082 0.075 0.084 0.076 0.069 0.063 0.057 0.053 0.047 0.042 0.037 0.033 0.033 0.029 0.026 0.022 0.020 0.026 0.023 0.020 0.017 0.015 0.021 0.018 0.016 0.014 0.012 0.014 0.011 0.010 0.008 0.007 0.009 0.007 0.006 0.005 0.004 26 27 28 29 30 7.896 7.943 7.984 8.022 8.055 6.906 6.935 6.961 6.983 7.003 6.491 6.514 6.534 6.551 6.566 6.118 6.136 6.152 6.166 6.177 5.480 5.492 5.502 5.510 5.517 4.956 4.964 4.970 4.975 4.979 % 15% Periods - 1% 0.990 0980 0971 0961 0.951 2 3 4 5 20 0980 0951 0.942 0924 0.906 3% 0971 0943 0915 0.88 0.863 4% 0962 0925 0.889 0855 0822 5% 15% 0952 0943 0907 0.890 0.864 0840 0823 10.792 0784 10747 7% 155 0873 0816 0.763 0.713 8% 0926 0.857 0.794 0.735 10.681 9% 0917 0.842 0772 0.708 0650 10% 0.909 0.826 0.751 0.683 0.621 12% 1993 0.797 0.712 0.636 0.567 14% 0.877 0768 0675 0.592 0.519 15% 0.370 0.756 0.658 10.572 0.497 15% 1962 0.743 0.641 0.552 0.476 18% 0.47 0.718 0.609 0.516 0437 20% 0.833 0694 0.579 0.482 0.402 Periods 1 2 3 4 5 0935 1.808 2624 3.387 4. 100 % 0.926 1.73 2577 3.312 13.993 9% 0917 1.759 2.531 3.240 3.890 | 10% 0.909 1.736 2437 3.170 3.791 12% 0.893 11.690 2402 3.037 3.605 14 0877 1.647 2.322 2914 3.433 0.870 1.626 2288 2255 3.352 16 0.862 1.605 2246 2.798 3.274 18 10.847 1.56 2.174 2690 3.127 Us 0.833 1.528 2.106 2.59 291 C 03 7 8 3 10 0942 088 0.933 | 0.871 0923 | 0.853 0914 0.837 0.905 0820 0.837 0813 0.789 0.766 0744 0.790 0760 0.31 0.703 0676 0.746 0.711 0677 0.645 0614 0.705 0665 0627 0.592 0.558 0666 0623 0.582 0544 0.508 0630 0.583 0.540 0.500 0463 0.596 0547 0502 0.460 0422 0564 0513 0.467 0.424 0.386 0.507 0.452 0.404 0.361 0.322 0.456 0.400 0.351 0.308 0270 0.432 0.376 0.327 0.284 10.247 0410 0354 0305 0263 0227 0370 0314 0266 10225 10.191 0.335 0279 0.233 0.194 0.162 6 7 8 5 10 1% 2% 4% 5% 5% 0990 0.90 0971 0.962 0952 0943 1.970 1.942 1913 1.886 1.859 1.833 2941 284 2929 2775 2723 2673 3902 3808 3717 3630 3.546 3465 4.853 4.713 4.580 4452 4.329 4212 5.795 5.601 5417 5242 5.076 4.917 6.723 6.472 6.230 | 6002 5.786 5.582 7652 7.325 7020 16.733 6.463 6210 8.566 8.162 7786 7.4.35 7.108 6.802 9471 8.983 8.530 18.111 7.722 7.360 10.368 9.737 9253 8.760 8.306 7.87 11.255 | 10.575 | 9954 9.385 8863 8.384 12.134 | 11.348 | 10.635 | 9.986 9.394 8853 13.004 | 12 106 | 11.236 | 10.563 | 9.899 9205 13.865 | 12.849 | 11.938 1.18 | 10.380 | 9.712 4.767 5.39 5971 6515 7.024 14.623 5.206 5.747 6.247 6.710 4.46 5.033 5.535 5.995 6.418 4.355 4.868 5.335 5.758 6.145 4.111 4.564 4.968 15.328 15.650 3889 4.28 4.639 4.946 15.216 3.784 4.160 4.487 4.772 15.019 3.685 4.039 4.344 4.607 4.833 3498 3.812 4.078 4.303 4.494 3.326 3.605 3.37 4.031 4.192 11 12 13 14 15 096 0.804 0.887 0.78 0879 10.773 0870 0.758 0.61 0743 0.722 0701 0681 061 0642 0650 0625 0601 0.577 0555 0585 0557 0.530 0.505 0.481 0.527 0.497 0469 0.442 0417 0475 0444 0415 0.388 0.362 0.429 0.397 0.368 0.340 0.315 10.388 0.356 10.326 0299 0275 0.350 0319 0.290 0263 0.239 0.287 0.257 0.229 0205 0.183 0.237 0.215 0.208 10.187 0.182 0.163 160 0141 0.140 0.123 0195 0.168 0.145 0.125 0.108 0.162 0.137 0.116 009 0.084 0.135 0.112 0.093 0.078 0.065 11 12 13 14 15 7.499 7943 18.358 8745 9108 7.139 6.805 7.536 7.161 7.904 17.487 8.244 | 7.786 8.559 8061 6495 6.814 7.103 7.367 7.606 15.938 6.194 6.424 16.628 6.811 5.453 5.660 5.842 6.002 6.142 5.234 5.421 5.588 5.724 5.847 5.029 5.197 5.342 5.468 5.575 4.656 4.793 4910 5.008 5.092 4.327 4.439 4.533 4.611 4.675 15 17 18 19 20 0853 0.728 0844 0714 0836 a700 0828 10686 0920 0673 0623 0605 0.587 0570 0.554 0.534 0513 0.494 0475 0.456 0.458 0394 0.436 10.371 0416 0350 0.396 0.331 0377 0.312 0339 0317 0296 0277 0258 0.292 0270 0250 02.2 0.215 0252 0.231 0212 0.194 0.178 0.218 0198 0.180 0.164 0.149 0.18 0.146 0.130 0.116 0.104 0.123 10.107 0.108 | 0.093 0.095 0.081 0.083 0.070 0.073 0.06] 0.093 0.00 0.068 0.060 0.051 0071 0.060 0.051 0.043 0.037 0.054 0.045 0.038 0.031 0.026 16 17 18 19 20 6.265 533 6.467 6.550 6.623 5.954 6.047 6.128 6.198 6.259 5.669 5.749 5.818 5.877 5.929 5.162 5222 5.273 5316 5.353 4.730 4.775 4.312 4.844 4.370 21 22 23 24 25 0.811 0.803 0.795 0.788 0.780 0660 0647 0.634 0.622 0610 0.538 0.522 0.507 0.492 0478 0.439 0359 0422 10.342 0.406 0.326 0390 0310 0375 0295 0294 0278 0262 0247 0233 0242 0226 0.211 0.197 0.184 0.19 0.184 0.170 0.158 0.146 10.164 0.150 0.138 0126 0.116 0.135 0.123 0.112 0.102 0.092 0.093 0.064 1083 0.056 0.074 | 0.049 0.066 0.043 0.059 0038 0.053 0.046 0.040 0.035 10.030 0.044 0.038 0.033 0.028 0.024 0.031 0.026 0.022 0.019 0.016 0.022 0.018 0.015 0013 0010 21 22 23 24 25 14.7 18 | 13.578 | 12.561 11.652 | 10.838 | 10.106 9447 8.851 8313 7.824 6.974 15.562 | 14.292 | 13.166 | 12166 | 11.274 | 10.47 9763 9.122 3544 8.022 C. 120 16.398 | 14.992 | 13.754 | 12.659 | 11.590 | 10.828 | 10.059 9.372 8.75 8.201 7250 17.226 | 15.678 | 14.324 | 13.134 | 12.085 | 11.158 | 10.336 9604 8.950 8.365 7.366 18.046 | 16.351 | 14.877 | 13.590 | 12462 | 11.470 | 10.594 | 9818 9.129 8.514 7.469 18.857 | 17.011] 15.415| 14.029 | 12.821 |1.764 | 10.836 | 10.01] 9.292 8649 7.562 19.660 | 17.658 | 15.937 | 14.451 | 13.163 | 12.042 | 11.061 10.201 9442 8.772 7.645 20.456 | 18.292 | 16.444 | 14.857 | 13.49 | 12.303 | 1.272 | 10.371 9.580 8.883 | T718 21.243 | 18.914| 16.936 | 15.247 | 13.79] 12.550 | 11.469 | 10.529 | 9.707 8.985 12.784 22.023 | 19.523 | 1743] 15.622 | 14.094 | 12.73 | 11.654 | 10.675 9823 9.07 7343 22.795 | 20121 | 17.877 | 15.983 | 14.375 | 13.003 | 11.826 | 10.310 9.929 19.161 7.896 23.560 | 20.707 | 18327 | 16.330 | 14.643 | 13.211 | 11.987|10.935 | 10.027 19237 7.943 24.316 | 21.281 | 18.764 | 16.663 | 14.898 | 13.406 | 12 137 | 11.51] 10.116 9.307 7984 25.066 | 21844 | 9.188 | 16.984 | 15.141| 13.591 | 12278 | 1.158 | 10.198 9.370 8.022 25.808 | 22396 | 19.600 | 17292 | 15.372 | 13.765 | 12.409 11.258 | 10.274 9.427 18.055 6.687 6.743 6.792 16.835 6.83 6312 16.359 6.399 6.434 6.464 5973 6.011 6.044 6.03 6.097 5.384 5.410 5.432 5.451 5.457 4.1 4.909 4.925 4.37 4948 6.906 6.935 26 27 28 29 30 0772 0.764 0.757 0.749 0.742 6961 0598 0526 0574 0563 0.552 0.464 0.450 0.437 0.424 0.412 0361 0.347 0.333 0321 0303 0281 0220 0268 0207 10255 10196 0.243 10.185 0231 10.174 0.142 0.097 0.172 0161 0.150 0141 0.131 0.135 0.125 0.116 0.107 0.099 0.106 0.098 0.090 0.082 0.075 0.084 0.076 0.069 0.063 0.057 0.053 0.033 0.047 0.029 0.042 0.026 0.037 | 0.022 0.033 0.020 0.026 0.023 0.020 0.017 0.015 0.021 0.018 0.016 0.014 0.012 0014 0.011 0010 0.008 0.007 26 27 28 23 30 0.009 0.007 0.006 0.005 0.004 15.480 5.492 5.502 6.491 6514 6.534 6.551 6.566 5.118 66.136 6.152 6.166 6.177 4.956 4964 4970 4.975 4979 6.93 7.003 5.510 5517 40 9779 8.244 7.105 6.642 6.233 5.548 4.997 10 0.672 0.453 0.307 0208 0.067 10.046 0.032 0.022 0.011 0.005 0.004 0.003 0.001 0.001 32.835 | 27.355 | 23.15] 19.793 | 17.159] 15.046 | 13.332 | 11.925 | 10.757 39.196 | 31.424 | 25.730 | 21.482 | 18.256 | 15.762 | 13.801 | 12.233 | 10.962 50 9915 661 6.246 8.304 | 7.133 5.554 4.999 50 0.608 0372 0228 0141 0.087 0054 0.034 0021 0.009 0013 0003 0.001 0.001 0.001