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Consider how Beat Valley, a popular swi resont, could use capital budgethg to decide whether the $8.5 millon Autumn Park Lodge expansion would be a good investment. (Clok the joon to viow the prosent value annuty tactor table) (Click the ioon fo view the present value factor table) (Click tha loon to view the future valuit annulfy facloe table) (Click the icon to view the Aiture visue factor tabin.) Read the tequirements. Requirement 1. What is the profects NPV7 is the investment aftractive? Why or why not? Net penent value of expantion Assume that Bear Valley's managers developed the following estimates concerning a planned expansion to its Autumn Park Lodge (all numbers assumed): Number of additional skiers per day 117 Average number of days per year that weather conditions allow skiing at Bear Valley 163 Useful life of expansion (in years). 10 Average cash spent by each skier per day. 239 Average variable cost of serving each skier per day . \$ 138 Cost of expansion $8,500,000 Discount rate 12% Assume that Bear Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $950,000 at the end of its ten-year life. It has already calculated the average annual net cash inflow per year to be $1,926,171. \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{14}{|c|}{ Present Value of Annuity of $1} \\ \hline Periods & 1% & 2% & 3% & 4% & 5% & 6% & 8% & 10% & 12% & 14% & 16% & 18% & 20% \\ \hline Period 1 & 0.990 & 0.980 & 0.971 & 0.962 & 0.952 & 0.943 & 0.926 & 0.909 & 0.893 & 0.877 & 0.862 & 0.847 & 0.833 \\ \hline Period 2 & 1.970 & 1.942 & 1.913 & 1.886 & 1.859 & 1.833 & 1.783 & 1.736 & 1.690 & 1.647 & 1.605 & 1.566 & 1.528 \\ \hline Period 3 & 2.941 & 2.884 & 2.829 & 2.775 & 2.723 & 2.673 & 2.577 & 2.487 & 2.402 & 2.322 & 2.246 & 2.174 & 2.106 \\ \hline Period 4 & 3.902 & 3.808 & 3.717 & 3.630 & 3.546 & 3.465 & 3.312 & 3.170 & 3.037 & 2.914 & 2.798 & 2.690 & 2.589 \\ \hline Period 5 & 4.853 & 4.713 & 4.580 & 4.452 & 4.329 & 4.212 & 3.993 & 3.791 & 3.605 & 3.433 & 3.274 & 3.127 & 2.991 \\ \hline Period 6 & 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 \\ \hline Period 7 & 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 \\ \hline Period 8 & 7.652 & 7.325 & 7.020 & 6.733 & 6.463 & 6.210 & 5.747 & 5.335 & 4.968 & 4.639 & 4.344 & 4.078 & 3.837 \\ \hline Period 9 & 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 \\ \hline Period 10 & 9.471 & 8.983 & 8.530 & 8.111 & 7.722 & 7.360 & 6.710 & 6.145 & 5.650 & 5.216 & 4.833 & 4.494 & 4.192 \\ \hline d 11 & 10.368 & 9.787 & 9.253 & 8.760 & 8.306 & 7.887 & 7.139 & 6.495 & 5.938 & 5.453 & 5.029 & 4.656 & 4.327 \\ \hline Period 12 & 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 \\ \hline Period 13 & 12.134 & 11.348 & 10.635 & 9.986 & 9.394 & 8.853 & 7.904 & 7.103 & 6.424 & 5.842 & 5.342 & 4.910 & 4.533 \\ \hline Period 14 & 13.004 & 12.106 & 11.296 & 10.563 & 9.899 & 9.295 & 8.244 & 7.367 & 6.628 & 6.002 & 5.468 & 5.008 & 4.611 \\ \hline Period 15 & 13.865 & 12.849 & 11.938 & 11.118 & 10.380 & 9.712 & 8.559 & 7.606 & 6.811 & 6.142 & 5.575 & 5.092 & 4.675 \\ \hline riod 20 & 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 \\ \hline Period 25 & 22.023 & 19.523 & 17.413 & 15.622 & 14.094 & 12.783 & 10.675 & 9.077 & 7.843 & 6.873 & 6.097 & 5.467 & 4.948 \\ \hline Period 30 & 25.808 & 22.396 & 19.600 & 17.292 & 15.372 & 13.765 & 11.258 & 9.427 & 8.055 & 7.003 & 6.177 & 5.517 & 4.979 \\ \hline Period 40 & 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 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{14}{|c|}{ Future Value of Annuity of $1} \\ \hline Periods & 1% & 2% & 3% & 4% & 5% & 6% & 8% & 10% & 12% & 14% & 16% & 18% & 20% \\ \hline Period 1 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 & 1.000 \\ \hline Period 2 & 2.010 & 2.020 & 2.030 & 2.040 & 2.050 & 2.060 & 2.080 & 2.100 & 2.120 & 2.140 & 2.160 & 2.180 & 2.200 \\ \hline Period 3 & 3.030 & 3.060 & 3.091 & 3.122 & 3.153 & 3.184 & 3.246 & 3.310 & 3.374 & 3.440 & 3.506 & 3.572 & 3.640 \\ \hline Period 4 & 4.060 & 4.122 & 4.184 & 4.246 & 4.310 & 4.375 & 4.506 & 4.641 & 4.779 & 4.921 & 5.066 & 5.215 & 5.368 \\ \hline Period 5 & 5.101 & 5.204 & 5.309 & 5.416 & 5.526 & 5.637 & 5.867 & 6.105 & 6.353 & 6.610 & 6.877 & 7.154 & 7.442 \\ \hline Period 6 & 6.152 & 6.308 & 6.468 & 6.633 & 6.802 & 6.975 & 7.336 & 7.716 & 8.115 & 8.536 & 8.977 & 9.442 & 9.930 \\ \hline Period 7 & 7.214 & 7.434 & 7.662 & 7.898 & 8.142 & 8.394 & 8.923 & 9.487 & 10.089 & 10.730 & 11.414 & 12.142 & 12.916 \\ \hline Period 8 & 8.286 & 8.583 & 8.892 & 9.214 & 9.549 & 9.897 & 10.637 & 11.436 & 12.300 & 13.233 & 14.240 & 15.327 & 16.499 \\ \hline Period 9 & 9.369 & 9.755 & 10.159 & 10.583 & 11.027 & 11.491 & 12.488 & 13.579 & 14.776 & 16.085 & 17.519 & 19.086 & 20.799 \\ \hline Period 10 & 10.462 & 10.950 & 11.464 & 12.006 & 12.578 & 13.181 & 14.487 & 15.937 & 17.549 & 19.337 & 21.321 & 23.521 & 25.959 \\ \hline Period 11 & 11.567 & 12. 169 & 12.808 & 13.486 & 14.207 & 14.972 & 16.645 & 18.531 & 20.655 & 23.045 & 25.733 & 28.755 & 32.150 \\ \hline Period 12 & 12683 & 13.412 & 14.192 & 15.026 & 15.917 & 16.870 & 18.977 & 21.384 & 24.133 & 27.271 & 30.850 & 34.931 & 39.581 \\ \hline Period 13 & 13.809 & 14.680 & 15.618 & 16.627 & 17.713 & 18.882 & 21.495 & 24.523 & 28.029 & 32.089 & 36.786 & 42.219 & 48.497 \\ \hline Period 14 & 14.947 & 15.974 & 17.086 & 18.292 & 19.599 & 21.015 & 24.215 & 27.975 & 32.393 & 37.581 & 43.672 & 50.818 & 59.196 \\ \hline Period 15 & 16.097 & 17.293 & 18.599 & 20.024 & 21.579 & 23.276 & 27.152 & 31.772 & 37.280 & 43.842 & 51.660 & 60.965 & 72.035 \\ \hline Period 20 & 22.019 & 24.297 & 26.870 & 29.778 & 33.066 & 36.786 & 45.762 & 57.275 & 72.052 & 91.025 & 115,380 & 146.628 & 186.688 \\ \hline Period 25 & 28.243 & 32.030 & 36.459 & 41.646 & 47.727 & 54.865 & 73.106 & 98.347 & 133.334 & 181.871 & 249.214 & 342.603 & 471,981 \\ \hline Period 30 & 34.785 & 40.568 & 47.575 & 56.085 & 66.439 & 79.058 & 113.283 & 164.494 & 241.333 & 356.787 & 530.312 & 790.948 & 1,181.882 \\ \hline Period 40 & 48.886 & 60.402 & 75.401 & 95.026 & 120.800 & 154.762 & 259.057 & 442.593 & 767.091 & 1,342.025 & 2,360.757 & 4,163,213 & 7,343,858 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{14}{|c|}{ Present Value of $1} \\ \hline Periods & 1% & 2% & 3% & 4% & 5% & 6% & 8% & 10% & 12% & 14% & 16% & 18% & 20% \\ \hline Period 1 & 0.990 & 0.980 & 0.971 & 0.962 & 0.952 & 0.943 & 0.926 & 0.909 & 0.893 & 0.877 & 0.862 & 0.847 & 0.833 \\ \hline Period 2 & 0.980 & 0.961 & 0.943 & 0.925 & 0.907 & 0.890 & 0.857 & 0.826 & 0.797 & 0.769 & 0.743 & 0.718 & 0.694 \\ \hline Period 3 & 0.971 & 0.942 & 0.915 & 0.889 & 0.864 & 0.840 & 0.794 & 0.751 & 0.712 & 0.675 & 0.641 & 0.609 & 0.579 \\ \hline Period 4 & 0.961 & 0.924 & 0.888 & 0.855 & 0.823 & 0.792 & 0.735 & 0.683 & 0.636 & 0.592 & 0.552 & 0.516 & 0.482 \\ \hline Period 5 & 0.951 & 0.906 & 0.863 & 0.822 & 0.784 & 0.747 & 0.681 & 0.621 & 0.567 & 0.519 & 0.476 & 0.437 & 0.402 \\ \hline Period 6 & 0.942 & 0.888 & 0.837 & 0.790 & 0.746 & 0 & 0.630 & 0.564 & 0.507 & 0.456 & 0.410 & 0.370 & 0.335 \\ \hline Period 7 & 0.933 & 0.871 & 0.813 & 0.760 & 0.711 & 0.665 & 0. & 0.513 & 0.452 & 0.400 & 0.354 & 0.314 & 0.279 \\ \hline Period 8 & 0.923 & 0.853 & 0.789 & 0.731 & 0.677 & 0.627 & & 0.467 & 0.404 & 0.351 & 0.305 & 0.266 & 0.233 \\ \hline Period 9 & 0.914 & 0.837 & 0.766 & 0.703 & 0.645 & 0.592 & 0.500 & 0.424 & 0.361 & 0.308 & 0.263 & 0.225 & 0.194 \\ \hline Peri & 0.905 & 0.820 & 0.744 & 0.676 & 0.614 & 0.558 & 33 & 0.386 & 0.322 & 0.270 & 0.227 & 0.191 & 0.162 \\ \hline d 11 & 0.896 & 0.804 & 0.722 & 0.650 & 0.585 & 0.527 & 0.429 & 0.350 & 0.287 & 0.237 & 0.195 & 0.162 & 0.135 \\ \hline Period 12 & 0.887 & 0.788 & 0.701 & 0.625 & 0.557 & 0.497 & 0.397 & 0.319 & 0.257 & & 0.168 & 0.137 & 0.112 \\ \hline Period 13 & 0.879 & 0.773 & 0.681 & 0.601 & 0.530 & 0.469 & 0.368 & 0.290 & 0.229 & 0.182 & 0.145 & 0.116 & 0.093 \\ \hline Period 14 & 0.870 & 0.758 & 0.661 & 0.577 & 0.505 & 0.442 & 0.340 & 0.263 & 0.205 & 0.160 & 0.125 & 0.099 & 0.078 \\ \hline Period 15 & 0.861 & 0.743 & 0.642 & 0.555 & 0.481 & 0.417 & 0.315 & 0.239 & 0.183 & 0.140 & 0.108 & 0.084 & 0.065 \\ \hline Period 20 & 0.820 & 0.673 & 0.554 & 0.456 & 0.377 & 0.312 & 0.215 & 0.149 & 0.104 & & & 0.037 & 0.026 \\ \hline Period 25 & 0.780 & 0.610 & 0.478 & 0.375 & 0.295 & 0.233 & 0.146 & 0.092 & 0.059 & 0.038 & 0.024 & 0.016 & 0.010 \\ \hline Period 30 & 0.742 & 0.552 & 0.412 & 0.308 & 0.231 & 0.174 & 0.099 & 0.057 & 0.033 & 0.020 & 0.012 & 0.007 & 0.004 \\ \hline Period 40 & 0.672 & 0.453 & 0.307 & 0.208 & 0.142 & 0.097 & 0.046 & 0.022 & 0.011 & 0.005 & 0.003 & 0.001 & 0.001 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{14}{|c|}{ Future Value of $1} \\ \hline Periods & 1% & 2% & 3% & 4% & 5% & 6% & 8% & 10% & 12% & 14% & 16% & 18% & 20% \\ \hline Period 1 & 1.010 & 1.020 & 1.030 & 1.040 & 1.050 & 1.060 & 1.080 & 1.100 & 1.120 & 1.140 & 1.160 & 1.180 & 1.200 \\ \hline Period 2 & 1.020 & 1.040 & 1.061 & 1.082 & 1.103 & 1.124 & 1.166 & 1.210 & 1.254 & 1.300 & 1.346 & 1.392 & 1.440 \\ \hline Period 3 & 1.030 & 1.061 & 1.093 & 1.125 & 1.158 & 1.191 & 1.260 & 1.331 & .1 .405 & 1.482 & 1.561 & 1.643 & 1.728 \\ \hline Period 4 & 1.041 & 1.082 & 1.126 & 1.170 & 1.216 & 1.262 & 1.360 & 1.464 & 1.574 & 1.689 & 1.811 & 1.939 & 2.074 \\ \hline Period 5 & 1.051 & 1.104 & 1.159 & 1.217 & 1.276 & 1.338 & 1.469 & 1.611 & 1.762 & 1.925 & 2.100 & 2.288 & 2.488 \\ \hline Period 6 & 1.062 & 1.126 & 1.194 & 1.265 & 1.340 & 1.419 & 1.587 & 1.772 & 1.974 & 2.195 & 2.436 & 2.700 & 2.986 \\ \hline Period 7 & 1.072 & 1.149 & 1.230 & 1.316 & 1.407 & 1.504 & 1.714 & 1.949 & 2.211 & 2.502 & 2.826 & 3.185 & 3.583 \\ \hline Period 8 & 1.083 & 1.172 & 1.267 & 1.369 & 1.477 & 1.594 & 1.851 & 2.144 & 2.476 & 2.853 & 3.278 & 3.759 & 4.300 \\ \hline Period 9 & 1.094 & 1.195 & 1.305 & 1.423 & 1.551 & 1.689 & 1.999 & 2.358 & 2.773 & 3.252 & 3.803 & 4.435 & 5.160 \\ \hline Period 10 & 1.105 & 1.219 & 1. 344 & 1.480 & 1.629 & 1.791 & 2.159 & 2.594 & 3.106 & 3.707 & 4.411 & 5.234 & 6.192 \\ \hline Period 11 & 1.116 & 1.243 & 1.384 & 1.539 & 1.710 & 1.898 & 2.332 & 2.853 & 3.479 & 4.226 & 5.117 & 6.176 & 7.430 \\ \hline Period 12 & 1.127 & 1.268 & 1.426 & 1.601 & 1.796 & 2.012 & 2.518 & 3.138 & 3.896 & 4.818 & 5.936 & 7.288 & 8.916 \\ \hline Period 13 & 1.138 & 1.294 & 1.469 & 1.665 & 1.886 & 2.133 & 2.720 & 3.452 & 4.363 & 5.492 & 6.886 & 8.599 & 10.699 \\ \hline Period 14 & 1.149 & 1.319 & 1.513 & 1.732 & 1.980 & 2.261 & 2.937 & 3.797 & 4.887 & 6.261 & 7.988 & 10.147 & 12.839 \\ \hline Period 15 & 1.161 & 1.346 & 1.558 & 1.801 & 2.079 & 2.397 & 3.172 & 4.177 & 5.474 & 7.138 & 9.266 & 11,974 & 15.407 \\ \hline Period 20 & 1.220 & 1.486 & 1.806 & 2.191 & 2.653 & 3.207 & 4.661 & 6.727 & 9.646 & 13.743 & 19.461 & 27.393 & 38.338 \\ \hline Period 25 & 1.282 & 1.641 & 2.094 & 2.666 & 3.386 & 4.292 & 6.848 & 10.835 & 17.000 & 26.462 & 40.874 & 62.669 & 95.396 \\ \hline Period 30 & 1.348 & 1.811 & 2.427 & 3.243 & 4.322 & 5.743 & 10.063 & 17.449 & 29.960 & 50.950 & 85.850 & 143.371 & 237.376 \\ \hline Period 40 & 1.489 & 2.208 & 3.262 & 4.801 & 7.040 & 10.286 & 21.725 & 45.259 & 93.051 & 188.884 & 378.721 & 750.378 & 1,469.772 \\ \hline \end{tabular}