Consider how Star Valley, a popular ski resort, could use capital budgeting to decide whether the $8.5 million Waterfal Park Lodge expansion would be a good investment. E (Click the icon to view the expansion estimates.) (Click the icon to view the present value annuity factor table.) (Click the icon to view the present value factor table.) (Click the icon to view the future value annuity factor table.) (Click the icon to view the future value factor table.) Readthe 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 Star Valley's managers developed the following estimates concerning a planned expansion to its Waterfall Park Lodge (all numbers assumed): Number of additional skiers per day.. 121 Average number of days per year that weather conditions allow skiing at Star Valley 159 ..... ...... Useful life of expansion (in years). 8. Average cash spent by each skier per day 244 Average variable cost of serving each skier per day %24 136 Cost of expansion.. $ 8,500,000 Discount rate. 12% Assume that Star Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $600,000 at the end of its eight-year life. It has already calculated the average annual net cash inflow per year to be $2,077,812. Present Value of Annuity of $1 Periods 1% 5% 0.952 2% 3% 4% 6% 0943 1.833 2.673 3.465 4.212 10% 0.909 1.736 2.487 8% 12% 0.893 1.690 2.402 3.037 14% 0.877 16% 0.862 1.605 2.246 18% 0847 20% 0.833 1.528 2.106 0.990 1.970 2.941 3.902 0.980 1.942 2.884 3.808 4.713 0.971 0.962 0.926 1.913 1.886 1.859 1.783 2.577 1.647 1.566 2.174 2.775 2.829 2.723 3.546 4.329 2.322 2.914 3.605 3.433 3.717 4.580 3.630 3.312 3.993 3.170 2.798 3.274 2.690 3.127 2.589 2991 4.853 4.452 3.791 5.795 6. 5.601 6.472 7.325 5.242 6.002 6.733 7.435 8.111 5.417 5.076 5.786 4.917 4.623 5.206 4.355 4.868 4.111 3.889 4.288 4.639 3.685 4.039 3.498 3.326 3.812 3.605 4.078 3.837 4.303 6.728 6.230 5.582 4.564 4.968 7.652 8.566 7.020 6.463 7.108 7.722 6.210 5.747 5.335 4.344 4.607 4.833 9. 8.162 8.983 7.786 6.802 7.360 4.946 5.216 6.247 6.710 5.759 5.328 5.650 4.031 4.192 10 9.471 8.530 6.145 4.494 10.368 9.787 11 9.253 8.760 9.385 8.306 7.887 7.139 6.495 5.938 5.453 5.029 5.197 4.656 4.327 11.255 10.575 12.134 11.348 10.635 9.986 13.004 12.106 11.296 10.563 9.899 13.865 12.849 11.938| 11.118 10.380 9.712 12 9.954 8.863 9.394 8.384 7.536 6.814 7.904 7.103 7.367 6.194 6.424 5.660 4.793 4.439 13 8.853 9.295 4.910 4.533 4.611 4.675 5.842 6.002 6.142 5.342 5.468 5.575 14 8.244 6.628 6.811 5.008 15 8.559 7.606 5.092 18.046 16.351 14.877 13.590 12.462 11.470 20 9.818 8.514 7.469 5.353 6.623 6.873 5.929 6.097 4.870 22.023 19.523 17.413 15.622 14.094 12.783 10.675 | 9.077 25 7.843 4.948 4.979 5.467 5.517 25.808 22.396 19.600 | 17.292 15.372 13.765 11.258 9.427 30 8.055 8.244 7.003 6.177 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 40 4.997 7.105 6.233 5.548 2345 Present Value of $1 16% Periods 5% 6% 8% 10% 12% 0.893 0.797 0.712 18% 0.847 2% 3% 4% 14% 0.877 1% 20% 0.962 0.925 0.943 0.890 0.840 0.909 0.826 0.980 0.961 0.942 0.924 0.906 0.971 0.952 0.926 0.862 0.743 0.990 0.980 0.971 0.961 0.951 0.833 0.694 0.579 0.482 0.476 0.437 0.402 0.769 0.943 0.915 0.888 0.863 0.907 0.864 0.857 0.794 0.735 0.681 0.718 0.609 0.516 0.889 0.855 0.822 0.675 0.751 0.641 0.552 0.683 0.636 0.592 0.519 0.823 0.784 0.792 4. 0.567 0.747 0.621 0.705 0.665 0.627 0.592 0.558 0.507 0.452 0.410 0.354 0.790 0.456 0.370 0.335 0.279 0.314 0.233 0.266 0.225 0.194 0.162 0.191 0.888 0.871 0.837 0.813 0.789 0.766 0.744 0.746 0.630 0.564 0.513 0.467 0.424 0.386 0.942 0.933 0.923 0,914 0.905 0.400 0.583 0.760 0.711 0.677 0.305 0.263 0.227 0.404 0.361 0.322 0.351 0.308 0.270 0.731 0.540 0.500 0.463 0.853 0.837 0.820 0.703 0.676 0.645 0.614 10 0.195 0.162 0.168 0.429 0.397 0.368 0.135 0.112 0.116 0.093 0.160 | 0.125| 0.099 | 0.078 0.140 0.108 0.084 0.065 0.350 0.319 0.287 0.237 0.208 0.182 0.527 0.896 0.887 0.879 0.870 0.861 0.650 0.585 0.804 0.788 0.722 11 0.137 0.257 0.229 0.205 0.239 0.183 0.497 0.701 0.681 0.661 0.642 0.625 0.557 0.530 12 0.145 0.290 0.469 0.442 0.417 0.601 13 0.773 0.263 0.340 0.758 0.743 0.577 0.555 0.505 0.481 14 0.315 15 0.037 | 0.026 0.073 0.051 0.456 0.377 0.312 0.375 0.295 0233 0.308 0.208 0.142 | 0.097 0.149| 0.104 0.215 0.146 0.092 0.099 0.057 0.046 0.673 0.554 0.478 0.412 0.307 20 25 0.820 0.780 0.742 0.038 0.024| 0.016| 0.010 0.020 0.012 0.007 | 0.004 0.001 0.059 0.033 0.610 0.552 0.453 0.174 0.231 30 40 0.001 0.003 0.005 0.022 0.011 0.672 Future Value of $1 Periods 1% 3% 1.030 2% 5% 1.050 6% 8% 10% 12% 1.120 14% 1.140 1.010 1.020 16% 1.020 1.040 1.061 1.082 1.104 18% 1.180 1.040 1.082 20% 1200 1.440 1.060 1.080 1.100 1210 1.331 1.464 1.160 1.346 1.561 1.811 2.100 1.061 1.093 1.126 1.103 1.158 1.216 1.276 1.124 1.191 1.262 1.338 1.166 1.260 1.360 1.469 1.254 1.405 1.574 1.762 1.300 1.482 1.689 1.925 1.030 1.041 1.392 1.643 1.939 2.288 1,125 1.170 1.217 4. 1.728 2.074 2488 1.051 1.159 1.611 6. 7. 1.062 1.072 1.083 1.094 1.126 1.149 1.194 1.230 1.267 1.265 1.316 1.369 1.423 1.480 1.340 1.407 1.419 1.504 1.587 1.714 1.851 1.772 1.974 2211 2476 2.773 3.106 2.195 2.502 2.853 3.252 3.707 2436 2.700 3.185 3.759 4.435 5.234 2.986 3.583 4.300 5.160 1.949 2.826 8. 1.172 1.195 1.219 1.477 1.594 1.689 2144 2.358 2.594 3278 3.803 1.305 1.344 1.551 1.629 1.999 2.159 10 1.105 1.791 4.411 6.192 1.243 1.268 11 1.116 1.384 1.426 1.469 1.539 1.710 1.796 1.886 1.980 1.898 2012 2133 2.261 2.397 2.332 2.518 2.720 2.937 3.172 2.853 3.138 3.452 3.797 4.177 3.479 3.896 4.363 4.226 4.818 5.492 6.261 7.138 5.117 5.936 6.886 7.988 6.176 7430 8.916 10.699 12.839 15.407 12 1.127 1.601 7.288 8.599 10.147 13 14 1.138 1.149 1.294 1.319 1.346 1.665 1.732 1.513 1.558 4.887 15 1.161 1.801 2.079 5.474 11.974 9.266 20 25 1.486 2.191 2.666 2.653 3.386 4.322 7.040 3.207 4.292 5.743 10.286 4.661 6.848 10.063 6.727 10.835 9.646 17.000 29.960 93.051 13.743 26.462 19.461 40.874 85.850 378.721 27.393 62.669 143.371 750.378 38.338 95.396 237376 1,469.772 1.220 1.282 1.806 2.094 2.427 1.641 17.449 45.259 50.950 30 1.348 1.811 3.243 4.801 188.884 21.725 40 1.489 2.208 3.262 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 valu Net present value of expansion $ Is the investment attractive? Why? e project because its NPV is The expansion is Requirement 2. Assume the expansion has no residual value. What is the projectrs NPV? Is the investment still attractive? Why or why not? Calculate the project's NPV. (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 $ Is the investment attractive? Why? : NPV. : because of the project's Without a residual value, the expansion