E12-33A (similar to) Consider how Golden Valley, a popular ski resort, could use capital budgeting to decide whether the $8.5 million Autumn Park Lodge expansion would be a good investment !!! (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) Read the fequirements 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 5 L = (Click the icon to view the present value factor table.) 1 Requirements 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 Turmur Jurricu 2 Number of additional skiers per day... 123 Average number of days per year that weather conditions allow skiing at Golden Valley 158 Useful life of expansion (in years). ................. Average cash spent by each skier per day ........... $ 247 Average variable cost of serving each skier per day .... $ ! 142 Cost of expansion.... ............$ 8,500,000 Discount rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 10% Assume that Golden Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $900,000 at the end of its nine-year life. It has already calculated the average annual net cash inflow per year to be $2,040,570. Reference Present Value of Annuity of $1 eriods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 18% 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 1.970 1.942 1.913 1.886 | 1.859 1.833 1.783 1.736 1.6901.647 1.6051.566 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 2.3222.246 2.174 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2798 2.690 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 3.433 3.274 3.127 5.795 5.601 5.417 5.2425.0764.917 4.6234 .355 4.111 3.889 3.685 3.498 6.728 6.472 6.230 6.002 5.786 5.582 5.206 4.8684.564 4.288 4.039 3.812 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 4.639 4.344 4.078 8.566 8.162 7.7867.435 7.108 6.802 6.247 5.759 5.328 4.946 4.607 4.303 9.471 8.983 8.530 8.111 7.722 7.360 6.710 6.145 5.650 5.216 4.833 4.494 10.368 9.787 9.253 8.760 8.306 7.887 7.139 6.495 5.938 5.453 5.029 4.656 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 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 12.004 11 10 11 200 10.522 10 000 Lanos 1934 7267 6.0 16.000 5 AO 15.000 na = 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 4.327 4.439 4.533 1411 Print Done Reference riods 1% 2% 3% 4% 0.990 0.9800.971 0.962 0.980 0.961 0.943 0.925 0.971 0.942 0.915 0.889 0.961 0.924 0.888 0.855 0.951 0.906 0.863 0.822 0.9420.888 0.837 0.790 0.933 0.871 0.813 0.760 0.923 0.853 0.789 0.731 0.914 0.837 0.766 0.703 0.905 0.820 0.744 0.676 0.896 0.804 0.722 0.650 0.887 0.788 0.701 0.625 0.879 0.773 0.681 0.601 1070 107601061 10. Present Value of S1 5% 6% 8% 10% 12% 14% 16% 18% 20% 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 0.907 0.890 0.857 0.826 0.797 0.769 0.743 0.718 0.694 0.864 0.840 0.794 0.751 0.712 0.675 0.641 0.609 0.579 0.823 0.792 0.735 0.683 0.636 0.592 0.552 0.516 0.482 0.784 0.747 0.681 0.621 0.567 0.519 0.476 0.437 0.402 0.746 0.705 0.630 0.564 0.507 0.456 0.410 . 0.335 0.711 0.665 0.583 0.513 0.452 0.400 0.354 0.314 0.279 0.677 0.6270.540 0.467 0.404 0.351 0.305 0.266 0.233 0.645 0.592 0.500 0.424 0.361 0.308 0.263 0.225 0.194 0.614 0.558 0.463 0.386 0.322 0.270 0.227 0.191 0.162 0.585 0.527 0.429 0.350 0.287 0.237 0.195 0.162 0.135 0.557 0.497 0.397 0.319 0.257 0.208 0.168 0.137 0.112 0.530 0.469 0.368 0.290 0.229 0.182 0.145 0.116 0.093 osas | LA 20 L 2 Lanoc LA 10 Loi 10.000 10.070 Print Done 9 of 9 (4 complete) Reference eriods 6% 1% 1.000 2.010 3.030 4.060 5.101 6.152 7.214 8.286 9.369 10.462 11.567 12.683 13.809 2% 1.000 2.020 3.060 4.122 5.204 6.308 7.434 8.583 9.755 10.950 3% 1.000 2.030 3.091 4.184 5.309 6.468 7.662 8.892 10.159 11.464 12.808 14.192 15.618 17.00 4% 1.000 2.040 3.122 4.246 5.416 6.633 7.898 9.214 10.583 12.006 13.486 15.026 16.627 10 200 Future Value of Annuity of $1 5% 8% 10% 1.000 1.000 1.000 1.000 2.050 2.060 2.080 2.100 3.153 3.184 3.246 3.310 4.310 4.375 4.506 4.641 5.526 5.637 5.867 6.105 6.802 6.975 7.336 7.716 8.142 8.394 8.923 9.487 9.549 9.897 10.637 11.436 11.027 11.491 12.488 13.579 12.578 13.181 14.487 15.937 14.207 14.972 16.645 18.531 15.917 16.870 18.977 21.384 17.713 18.882 21.495 24.523 10.00 2015. I 2016 12% 14% 1.000 1.000 2.120 2.140 3.374 3.440 4.779 4.921 6.353 6.610 8.115 8.536 10.089 10.730 12.300 13.233 14.776 16.085 17.549 19.337 20.655 23.045 24.133 27.271 28.029 32.089 22.2021 27 401 16% 1.000 2.160 3.506 5.066 6.877 8.977 11.414 14.240 17.519 21.321 25.733 30.850 36.786 42 67 12.169 13.412 14.680 15.01 27.075 14047 Print Done 9 of 9 (4 complete) Reference Future Value of $1 eriods 8% 169 1.16 1% 1.010 1.020 "1.030 1.041 1.051 1.062 1.072 1.083 1.094 1.105 4% 1.040 1.082 1.125 1.170 1.217 1.34 1.080 1.166 1.260 1.360 1.469 2% 3% 1.020 11.030 1.040 11.061 1.061 11.093 11.0821.126 11.104 11.159 11.126 11.194 1.149 1.230 1.172 1.267 1.195 11.305 1.219 1.344 1.243 1.384 1.268 11.426 1.294 1.469 120 1512 5% 16% 1.050 1.060 1.103 1.124 1.158 1.191 1.216 1.262 1.276 1.338 1.340 1.419 1.407 1.504 1.477 1.594 1.551 1.689 1.629 1.791 1.710 1.898 1.796 2.012 1.886 2.133 1000 241 1.265 1.316 1.369 1.423 1.480 | 10% 1.100 1.210 1.331 1.464 1.611 1.772 1.949 2.144 2.358 2.594 2.853 3.138 3.452 2.703 1.56 1.81 2.10 2.4 2.81 1.587 1.714 1.851 1.999 2.159 12% 1.120 1.254 1.405 1.574 1.762 1.974 2.211 2.476 2.773 3.106 3.479 3.896 4.363 1007 14% 1.140 1.300 1.482 1.689 1.925 2.195 2.502 2.853 3.252 3.707 4.226 4.818 5.492 1.116 2.332 2.518 12 13 1.539 1.601 1.665 1.72 1.127 1.138 2.720 Print Done