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 the factor to three decimal places, X.XXX. Round your calculations to the nearest whole dollar.) Years Years 1 Present value of -7 annuity Year 0 Initial investment Net present value of expansion Annuity PV Net Factor Cash (i=10%, Inflow n=7) PV Factor (i=10%, n=7) Present Value 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 Average variable cost of serving each skier per day Cost of expansion Discount rate Print Done 121 skiers 142 days 7 years 241 83 11,000,000 10% More info 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's average annual net cash inflow per year is expected to be $2,714,756. Print Done - . X Reference Present Value of $1 Periods 1% 2% 3% 4% 5% Period 1 0.990 0.980 0.971 Period 2 0.980 0.961 0.943 0.925 Period 3 0.971 0.942 0.915 0.889 0.864 Period 4 0.961 0.924 0.888 0.855 0.823 0.792 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 6% 7% 0.962 0.952 0.943 0.935 8% 9% 10% 15% 14% 0.926 0.917 0.909 0.893 0.877 0.907 0.890 0.873 0.857 0.842 0.826 0.797 0.769 0.840 0.816 0.794 0.772 0.751 0.712 0.675 0.763 0.735 0.708 0.683 0.636 0.592 0.713 0.681 0.650 0.621 0.567 0.519 Period 6 0.942 0.888 0.837 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.507 0.456 Period 7 0.933 0.871 0.813 Period 8 Period 9 0.914 0.837 0.766 0.703 0.645 0.592 Period 10 0.905 0.820 0.744 0.676 0.614 0.558 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.452 0.400 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.404 0.351 0.544 0.500 0.460 0.424 0.361 0.308 0.508 0.463 0.422 0.386 0.322 0.270 Period 11 0.896 0.804 0.722 0.650 0.585 Period 12 0.887 0.788 0.701 0.527 0.475 0.429 0.388 0.350 0.287 0.237 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.257 0.208 Period 13 0.879 0.773 0.681 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.229 0.182 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.205 0.160 Period 15 0.861 0.743 0.642 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.183 0.140 O Period 16 0.853 0.728 0.623 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.163 0.123 Period 17 0.844 0.714 0.605 0.513 Period 18 0.836 0.700 0.587 0.494 0.416 Period 19 0.828 0.686 0.570 0.475 0.396 0.436 0.371 0.317 0.270 0.231 0.198 0.146 0.108 0.350 0.296 0.250 0.212 0.180 0.130 0.095 0.331 0.277 0.232 0.194 0.164 0.116 0.083 Period 20 0.820 0.673 0.554 0.456 0.377 0.312 0.258 0.215 0.178 0.149 0.104 0.073 Period 21 0.811 0.660 0.538 0.439 0.359 0.294 0.242 0.199 Period 22 0.803 0.647 0.522 0.422 0.342 Period 23 0.795 0.634 0.507 0.406 0.326 0.278 0.226 0.262 0.211 0.164 0.135 0.093 0.184 0.150 0.123 0.083 0.056 0.170 0.138 0.112 0.074 0.049 0.064 Print Done Reference Present Value of Ordinary Annuity of $1 Periods 1% 2% 3% Period 1 0.990 0.980 0.971 Period 2 1.970 1.942 1.913 Period 3 2.941 2.884 2.829 Period 4 3.902 3.808 3.717 Period 5 4.853 4.713 4.580 4% 5% 6% 7% 8% 9% 10% 12% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 14% 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.690 1.647 2.775 2.723 2.673 2.624 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 2.577 2.531 2.487 2.402 2.322 Period 6 5.795 5.601 Period 7 6.728 6.472 5.417 6.230 Period 8 7.652 7.325 7.020 Period 9 8.566 8.162 7.786 7.435 Period 10 9.471 8.983 8.530 8.111 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.111 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 3.889 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 7.108 6.802 6.515 6.247 5.995 5.759 5.328 4.946 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 Period 11 10.368 9.787 9.253 Period 12 11.255 10.575 9.954 8.760 9.385 8.306 7.887 7.499 7.139 6.805 6.495 5.938 5.453 8.863 8.384 7.943 7.536 7.161 6.814 6.194 5.660 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6.424 5.842 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 6.811 6.142 Period 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 6.974 6.265 Period 17 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.022 7.120 6.373 Period 18 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.250 6.467 Period 19 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.129 8.514 7.469 6.623 Period 21 18.857 17.011 15.415 14.029 12.821 11.764 10.836 10.017 9.292 8.649 7.562 6.687 Print Done nt