Consider how Pine Valley, a popular ski resort, could use capital budgeting to decide whether the $8 million Snow Park Lodge expansion would be a good investment. E: (Click the icon to view the expansion estimates.) 5 (Click the icon to view the present value annuity factor table.) 5 (Click the icon to view the present value factor table.) (Click the icon to view the future value annuity factor table.) ck 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 $ Assume that Pine Valley's managers developed the following estimates concerning a planned expansion to its Snow Park Lodge (all numbers assumed): 117 159 Number of additional skiers per day................. Average number of days per year that weather conditions allow skiing at Pine 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..... .........$ 245 142 8,000,000 VUOLULOA a llI Il . . . . . . . . . . . . . . . . . . . . . . . . . . Discount rate. .................................. 14% Assume that Pine 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 vear to be $1.916.109. Present Value of Annuity of $1 Periods 1% 0.990 1.970 2.941 3.902 4.853 2% 0.980 1.942 2.884 3.808 4.713 3% 0.971 1.913 2.829 3.717 4.580 4% 0.962 1.886 2.775 3.630 4.452 5% 0.952 1.859 2.723 3.546 4.329 6% 1 8% 0.943 | 0.926 1.833 1.783 2.673 2.577 3.465 3.312 4.212 3.993 10% 0.909 1.736 2.487 3.170 3.791 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 18% | 0.847 1.566 2.174 2.690 3.127 20% 0.833 1.528 2.106 2.589 2.991 5.795 6.728 7.652 8.566 9.471 5.601 6.472 7.325 8.162 8.983 5.417 6.230 7.020 7.786 8.530 5.242 6.002 6.733 7.435 8.111 5.076 5.786 6.463 7.108 7.722 4.917 5.582 6.210 4.623 5.206 5.747 6.247 6.710 4.355 4.868 5.335 5.759 6.145 3.889 4.288 4.639 4.946 5.216 4.111 4.564 4.968 5.328 5.650 5.938 6.194 6.424 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 6.802 7.360 10.368 9.787 11.255 10.575 12.134 | 11.348 13.004 12.106 9.253 8.760 8.306 9.954 9.385 8.863 10.635 | 9.986 | 9.394 | 11.296 10.563 9.899 7.887 8.384 8.853 9.295 7.139 7.536 7.904 8.244 6.495 6.814 7.103 7.367 5.453 5.660 5.842 5.029 5.197 5.342 4.656 4.793 4.910 4.327 4.439 4.533 67890 8.530 13.902 | 3.808 | 3.717 | 3.630 | | 3.546 | 3.465 | 3.312 | 3.170 | 3.037 | 2.914 | 2.798 | 2.690 | 2.589 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 13.605 3.433 3.274 13.127 2.991 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 4.111 | 3.889 3.685 3.498 3.326 6.728 | 6.472 6.230 6.002 5.786 5.582 5.206 4.868 4.564 4.288 | 4.039 | 3.812 | 3.605 7.652 | 7.325 7.020 6.733 16.463 6.210 5.747 5.335 4.968 4.639 4.344 4.078 3.837 8.566 | 8.162 7.786 7.435 7.108 6.802 6.247 5.759 5.328 4.946 4.607 4.303 4.031 9.471 | 8.983 8.111 7.722 7.360 6.710 6.145 5.650 5.216 4.833 4.494 4.192 10.368 9.787 9.253 8.760 8.306 7.887 7.139 6.495 5.938 15.453 5.029 4.656 4.327 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 6.194 5.660 5.197 4.793 4.439 | 12.134 | 11.348 | 10.635 | 9.986 | 9.394 8.853 7.904 7.103 16.424 5.842 5.342 4.910 4.533 13.004 12.106 | 11.296 | 10.563] 9.899 9.295 8.244 7.367 | 6.628 16.002 15.468 5.008 4.611 | 13.865 | 12.849 | 11.938| 11.118| 10.380 | 9.712 | 8.559 | 7.606 | 6.811 16.142 5.575 5.092 4.675 | 18.046| 16.351| 14.877 | 13.590 | 12.462 | 11.470 | 9.818 | 8.514 | 7.469 6.623 5.929 5.353 4.870 22.023 | 19.523 | 17.413| 15.622 | 14.094 | 12.783 | 10.675] 9.077 17.843 | 6.873 | 6.097 5.467 4.948 25.808122.396 19.600 117.292 15.372113.765 11.258 9.427 8.055 7.003 6.177 5.517 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 Future Value of Annuity of $1 Periods 5% 1.000 1% 1.000 2.010 3.030 4.060 5.101 2% 1.000 2.020 3.060 4.122 5.204 3% 1.000 2.030 3.091 4.184 5.309 4% 1.000 2.040 3.122 4.246 5.416 2.050 3.153 4.310 5.526 6% 1.000 2.060 3.184 4.375 5.637 8% 1.000 2.080 3.246 4.506 5.867 10% 1.000 2.100 3.310 4.641 6.105 12% 1.000 2.120 3.374 4.779 6.353 14% 1.000 2.140 3.440 4.921 6.610 16% 1.000 2.160 3.506 5.066 6.877 18% 1.000 2.180 3.572 5.215 7.154 20% 1.000 2.200 3.640 5.368 7.442 oop voor own 6.152 7.214 8.286 9.369 10.462 6.308 7.434 8.583 9.755 10.950 6.468 7.662 8.892 10.159 11.464 6.633 7.898 9.214 10.583 12.006 13.486 15.026 16.627 18.292 6.802 8.142 9.549 11.027 12.578 6.975 8.394 9.897 11.491 13.181 7.336 8.923 10.637 12.488 14.487 7.716 9.487 11.436 13.579 15.937 8.115 10.089 12.300 14.776 17.549 8.536 10.730 13.233 16.085 19.337 8.977 11.414 14.240 17.519 21.321 9.442 12.142 15.327 19.086 23.521 9.930 12.916 16.499 20.799 25.959 11.567 12.683 13.809 14.947 12.169 13.412 14.680 15.974 12.808 14.192 15.618 17.086 14.207 15.917 17.713 | 19.599 14.972 16.645 16.870 18.977 18.882 21.495 21.015 | 24.215 18.531 21.384 24.523 27.975 20.655 24.133 28.029 23.045 27.271 32.089 37.581 25.733 30.850 36.786 43.672 28.755 34.931 42.219 50.818 32.150 39.581 48.497 59.196 14 | | 4.060 5.101 4.122 5.204 4.246 5.416 4.375 5.637 4.506 5.867 4.641 6.105 4.779 6.353 4.921 6.610 5.066 6.877 5.215 7.154 5.368 7.442 6.152 7.214 18.286 19.369 10.462 6.308 7.434 8.583 9.755 10.950 4.184 5.309 16.468 7.662 8.892 10.159 11.464 16.633 7.898 9.214 10.583 12.006 14.310 5.526 6.802 8.142 9.549 11.027 12.578 6.975 8.394 9.897 1.491 13.181 7.336 8.923 10.637 12.488 14.487 7.716 9.487 11.436 13.579 15.937 45 6 7890HQ84b9%99 11.567 12.683 13.809 14.947 16.097 12.169 13.412 14.680 15.974 7.293 12.808 14.192 15.618 17.086 18.599 13.486 15.026 16.627 18.292 20.024 14.207 15.917 17.713 19.599 21.579 14.972 16.870 18.882 21.015 23.276 16.645 18.977 21.495 24.215 127.152 18.531 21.384 24.523 27.975 31.772 8.115 8.536 18.977 9.442 9.930 10.089 10.730 11.414 12.142 12.916 12.300 13.233 14.240 15.327 16.499 14.776 16.085 17.519 19.086 20.799 17.549 19.337 21.321 23.521 25.959 20.655 23.045 25.733 28.755 32.150 24.133 27.271 30.850 34.931 39.581 28.029 32.089 36.786 42.219 48.497 32.393 37.581 43.672 50.818 59.196 37.280 43.842 51.660 60.965 72.035 72.052 91.025 115.380 146.628 186.688 133.334 181.871 1249.214 342.603 471.981 241.333 356.787 530.312 1790.948 | 1,181.882 767.091 |1,342.025 | 2,360.757 14,163.213 | 7,343.858 22.019 28.243 34.785 48.886 24.297 32.030 40.568 60.402 26.870 36.459 47.575 75.401 29.778 41.646 56.085 95.026 33.066 36.786 47.727 54.865 66.439 79.058 120.800 | 154.762 45.762 57.275 73.106 98.347 113.283 164.494 1259.057 | 442.593 Periods 2% 0.980 1% 0.990 0.980 0.971 0.961 0.951 3% 0.971 0.943 0.915 0.888 0.863 4% 0.962 0.925 0.889 0.855 0.822 Present Value of $1 5% 6% 8% 10% 0.952 0.943 0.926 0.909 0.907 0.890 0.857 0.826 0.864 0.840 0.794 0.751 0.823 0.792 0.735 0.683 0.784 0.747 0.681 0.621 12% 0.893 0.797 0.712 0.636 0.567 14% 0.877 0.769 0.675 0.592 0.519 16% 0.862 0.743 0.641 0.552 0.476 18% 0.847 0.718 0.609 0.516 0.437 20% 0.833 0.694 0.579 0.482 0.402 0.942 0.924 0.906 0.837 0.813 o * oooo voor 0.942 0.933 0.923 0.914 0.905 0.888 0.871 0.853 0.837 0.820 0.789 0.766 0.744 0.790 0.760 0.731 0.703 0.676 0.746 0.711 0.677 0.645 0.614 0.705 0.665 0.627 0.592 0.558 0.630 0.583 0.540 0.500 0.463 0.429 0.397 0.368 0.340 0.564 0.513 0.467 0.424 0.386 0.350 0.319 0.290 0.263 0.507 0.452 0.404 0.361 0.322 0.456 0.400 0.351 0.308 0.270 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 0.896 0.887 0.879 0.870 0.804 0.788 0.773 0.758 0.722 0.701 0.681 0.661 0.650 0.625 0.601 0.577 0.585 0.557 0.530 0.505 0.527 0.497 0.469 0.442 0.287 0.257 0.229 0.205 0.237 0.208 0.182 0.160 0.195 0.168 0.145 0.125 0.162 0.137 0.116 0.099 0.135 0.112 0.093 0.078 0.961 0.951 0.924 0.906 10.888 0.863 0.855 0.822 0.942 0.888 0.933 | 0.871 0.923 0.853 10.914 | 0.837 0.905 0.820 0.837 0.813 0.789 0.766 0.744 0.790 0.760 0.731 0.703 0.676 0.823 0.792 10.735 | 0.683 | 0.636 | 0.592 | 0.552 | 0.516 | 0.482 0.784 10.747 | 0.681 0.621 10.567 10.519 | 10.476 10.437 0.402 0.746 0.705 0.630 0.564 0.507 0.456 0.410 0.370 0.335 0.711 0.665 0.583 0.513 0.452 0.400 0.354 0.314 0.279 0.677 0.627 0.540 0.467 0.404 0.351 0.305 0.266 10.233 0.645 0.592 0.500 0.424 0.361 0.308 0.263 0.225 0.194 0.614 10.558 0.463 0.386 0.322 0.270 0.227 0.191 0.585 10.527 0.429 0.350 0.287 0.237 0.195 10.162 0.135 10.557 | 0.497 0.397 0.319 0.257 0.208 0.168 0.137 0.112 0.530 0.469 10.368 0.290 0.229 0.182 0.145 10.116 0.093 0.505 0.442 10.340 0.263 0.205 0.160 0.125 0.099 0.078 0.417 0.315 0.239 10.183 0.140 0.108 0.084 0.065 0.162 Q345 0.896 0.887 0.879 0.870 0.861 0.804 0.788 0.773 0.758 0.743 0.722 0.701 0.681 0.661 0.642 0.650 0.625 0.601 0.577 0.555 0.481 0.038 10.820 | 0.673 0.554 0.456 0.377 0.312 0.215 0.149 0.104 0.073 0.051 0.037 10.026 0.780 0.610 0.478 10.375 0.295 0.233 0.146 0.092 0.059 0.024 0.016 0.010 10.742 10.552 10412 10.308 10.231 10.174 10.099 10.057 10.033 10.020 10.012 10.00 0.007 0.004 10.672 | 0.453 | 0.307 | 0.208 | 0.142 | 0.097 | 0.046 | 0.022 | 0.011 | 0.005 | 0.003 | 0.001 | 0.001 Future Value of $1 Periods 1% 1.010 1.020 1.030 1.041 1.051 2% 1.020 1.040 1.061 1.082 1.104 3% 1.030 1.061 1.093 1.126 1.159 4% 1.040 1.082 1.125 1.170 1.217 5% 1.050 1.103 1.158 1.216 1.276 6% 1.060 1.124 1.191 1.262 1.338 8% 1.080 1.166 1.260 1.360 1.469 1.587 1.714 1.851 1.999 2.159 10% 1.100 1.210 1.331 1.464 1.611 12% 1.120 1.254 1.405 1.574 1.762 14% 1.140 1.300 1.482 1.689 1.925 16% 1.160 1.346 1.561 1.811 2.100 18% 1.180 1.392 1.643 1.939 2.288 20% 1.200 1.440 1.728 2.074 2.488 1.340 1.062 1.072 1.083 1.094 1.105 1.126 1.149 1.172 1.195 1.219 1.194 1.230 1.267 1.305 1.344 1.265 1.316 1.369 1.423 1.480 1.407 1.477 1.551 1.629 1.419 1.504 1.594 1.689 1.791 1.772 1.949 2.144 2.358 2.594 2.853 3.138 3.452 3.797 1.974 2.211 2.476 2.773 3.106 2.195 2.502 2.853 3.252 3.707 4.226 4.818 5.492 6.261 2.436 2.826 3.278 3.803 4.411 2.700 3.185 3.759 4.435 5.234 2.986 3.583 4.300 5.160 6.192 7.430 8.916 10.699 12.839 1.116 1.127 1.138 1.149 1.710 1.796 1.243 1.268 1.294 1.319 1.384 1.426 1.469 1.513 1.539 1.601 1.665 1.898 2.012 2.133 2.261 2.332 2.518 2.720 2.937 3.479 3.896 4.363 4.887 5.117 5.936 6.886 7.988 6.176 7.288 8.599 10.147 1.886 1.732 1.980 1.041 1.051 1.082 1.104 1.126. 1.159 1.170 1.217 1.262 1.338 1.360 1.469 1.464 1.611 1.574 1.762 1.811 2.100 1.939 2.288 2.074 2.488 1.126 1.149 1.172 1.195 1.219 1.194 1.230 1.267 1.305 1.344 1.265 1.316 1.369 1.423 1.480 1.216 1.276 1.340 1.407 1.477 1.551 1.629 1.710 1.796 1.886 1.980 2.079 1.419 1.504 1.594 1.689 1.791 1.587 1.714 1.851 1.999 2.159 1.974 2.211 2.476 2.773 3.106 1.062 1.072 1.083 1.094 1.105 1.116 1.127 1.138 1.149 1.161 2.436 2.826 3.278 3.803 4.411 1.689 1.925 2.195 2.502 2.853 3.252 3.707 4.226 4.818 5.492 6.261 7.138 2.700 3.185 3.759 4.435 5.234 1.772 1.949 2.144 2.358 2.594 2.853 3.138 3.452 3.797 4.177 2.986 3.583 4.300 5.160 6.192 7.430 8.916 10.699 12.839 15.407 1.539 1.243 1.268 1.294 1.319 1.346 1.384 1.426 1.469 1513 1.558 1.601 1.665 1.732 1.801 1.898 12.012 2.133 12.261 2.397 2.332 2.518 2.720 2.937 3.172 3.479 3.896 4.363 14.887 5.474 5.117 5.936 6.886 7.988 9.266 6.176 7.288 8.599 10.147 1.974 1.220 1.282 1.348 1.489 1.486 1.641 1.811 2.208 1.806 2.094 2.427 3.262 2.191 2.666 3.243 4.801 2.653 3.386 4.322 7.040 3.207 4.292 5.743 10.286 4.661 6.848 10.063 21.725 6.727 10.835 17.449 45.259 9.646 17.000 29.960 93.051 13.743 26.462 50.950 188.884 | 19.461 40.874 85.850 27.393 38.338 62.669 95.396 143.371 1237.376 750.378 11,469.772 1 Requirements hf 1. What is the project's NPV? Is the investment attractive? Why or why not? 2. Assume the expansion has no residual value. What is the project's NPV? Is the investment still attractive? Why or why not? Print Done