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 IRR? Is the investment attractive? Why or why not? The internal rate of return (IRR) of the expansion is More info - Data table 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 121 skiers 142 days 7 years $ 241 Average variable cost of serving each skier per day 83 11,000,000 10% Assume that Hunter Valley uses the straight-line depreciation method and expects the lodge expansion to have no residual value at the end of its seven-year life. The project is expected to have an average annual net cash inflow of $2,714,756. The NPV of the expansion is expected to be $2,215,432. Cost of expansion Discount rate Print Done Type here to search W O 72F Save Check answer 10:56 PM 4/28/2022