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Consider how Root Valley Stream Park Lodge could use capital budgeting to decide whether the $13,000,000 Stream Park Lodge expansion would be a good investment.
Consider how Root Valley Stream Park Lodge could use capital budgeting to decide whether the $13,000,000 Stream Park Lodge expansion would be a good investment. Assume Root Valley's managers developed the following estimates concerning the expansion: (Click the icon to view the estimates.) Read the requirements. A Data Table - X Requirement 1. Compute the average annual net cash inflow from the expansion. 120 skiers The average annual net cash inflow from the expansion is $ 145 days Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Root 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 10 years 245 $ 13,000,000 8% Assume that Root 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 ten-year life. Enter any number in the edit fields and then click Check
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