Consider how McKnight Valley River Park Lodge could use capital budgeting to decide whether the $11,500,000 River Park Lodge expansion would be a good Investment. Assume McKnight 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? Years Net Cash Inflow Present Value Calculate the net present value of the expansion (Enter any factor amounts to three decimal places, X.XXX. Round to the nearest whole dollar) Annuity PV Factor PV Factor (1-14%, (I14%, n=10) ne 10) Years 1-10 Prevent value of annuity 2616900 Year 10 Present value of residual value Total PV of cash inflows Year o initial investment Net present value of expansion 850000 EO Data table Blo 116 skiers 141 days 10 years Number of additional skiers per day Average number of days per year that weather conditions allow skiing at McKnight 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 $ 237 77 11,500,000 Discount rate 14% Print Done More info Blue o alue o Assume that McKnight Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $850,000 at the end of its ten-year life. They have already calculated the average annual net cash inflow per year to be $2,616,960. of cash estme! RO 4% Present Value of $1 Periods 1% 2% 3% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.9090.893 0.877 0.870 0.862 0.847 0.833 Period 2 0.980 0.961 0.943 0.925 0.9070.890 0.873 0.8570.8420.826 0.797 0.769 0.756 0.743 0.7180.694 Period 3 0.971 0.9420.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 Period 4 0.961 0.9240.888 0.855 0.823 0.7920.763 0.735 0.708 0.683 0.636 0.592 0.5720552 0.516 0.482 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.567 0.519 0.497 0.476 0.437 0.402 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 0.432 0.410 0.370 0.335 Period 7 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.452 0.400 0.376 0.354 0.3140.279 Period 8 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.4040.351 0.327 0.305 0.266 0.233 Period 9 0.914 0.837 0.766 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.361 0.308 0.284 0.263 0.225 0.194 Period 10 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.322 0.270 0.2470 227 0.191 0.162 Period 11 0.896 0.804 0.722 0.650 0585 0.527 0.475 0.429 0.388 0.350 0.287 0.237 0.215 0.195 0.162 0.135 Period 12 0.887 0.788 0.701 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.257 0.208 0.187 0.168 0.137 0.112 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 0.163 0.145 0.116 0.093 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 0.141 0.125 0.099 0.078 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 0.123 0.108 0.084 0.065 Period 16 0.853 0.728 0.623 0.534 0.458 0.394 0.3390.292 0.252 0.218 0.163 0.123 0.107 0.093 0.071 0.054 Period 17 0.844 0.714 0.605 0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.146 0.108 0.093 0.080 0.060 0.045 Period 18 0.836 0.700 0.587 0.494 0.416 0.350 0.296 0.250 0.212 0.180 0.130 0.095 0.081 0.069 0.051 0.038 Period 19 0.828 0.686 0.570 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.116 0.083 0.070 0.060 0.043 0.031 Period 20 0.820 0.673 0.5540456 0.377 0.312 0.258 0.215 0.178 0.149 0.104 0.073 0.061 0.051 0.037 0.026 Period 21 0.811 0.660 0.538 0.439 0.359 0.2940.242 0.1990.1640.135 0.093 0.064 0.053 0.044 0.031 0.022 2% 6% Present Value of Ordinary Annuity of $1 Periods 1% 3% 4% 5% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 Period 2 1.970 1.942 1913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1690 1,647 1.626 1.605 1566 1.528 Period 3 2.9412.8842829 2.775 2.723 2673 2.624 2.577 2.531 2487 2402 2.3222.283 2.246 2.174 2.106 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3 312 3.240 3.170 3,037 2.914 2855 2.798 2.690 2.589 Period 5 4.8534.7134.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.352 3274 3.127 2.991 Period 6 5.795 5.601 5417 5242 5.076 4.917 4.767 4.623 4.486 4.355 4.111 3.889 3.784 3.685 3.498 3326 Period 7 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5206 5,033 4868 4564 4288 4.160 4.039 3.812 3.605 Period 8 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5535 5.335 4.968 4.639 4.487 4.344 4.078 3.837 Period 9 8.566 8.1627.786 7.435 7.108 6.802 6.515 6 247 5.995 5.759 5328 4946 4.772 4.607 4,303 4.031 Period 10 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 5019 4833 4494 4.192 Period 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.938 5.453 5.234 5.029 4.656 4327 Period 12 11.255 10.575 9.954 9.3858.863 8.384 7.943 7.536 7.161 6.814 6.194 5660 5.421 5.1974.793 4439 Period 13 12.134 11.348 10.6359.986 9.394 8.853 8.358 7.904 7.487 7.103 6.424 5.8425583 5.342 4.910 4533 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7367 6.628 6.002 5.724 6.468 5.008 4611 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 5.847 5.575 5.092 4.675 Period 16 14.718 13.578 12.561 11.652 10.838 10.106 9447 8,851 8.313 7.8246.974 6.265 5.954 5.669 5162 4730 Period 17 15.562 14.292 13.166 12 166 11.274 10.477 9.763 0.122 8.544 8.022 7.120 6.373 6.047 5.749 5.222 4775 Period 18 16,398 14.992 13.754 12659 11.690 10.828 10.0599372 8.756 8.2017.250 6.467 6.128 5.818 5.273 4812 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 6.198 5.877 5.316 4.844 Period 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9818 9.129 8.514 7.469 6,623 6259 5929 5.353 4.870 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 6312 5.973 5.384 4.891