E12-52B (similar to) Question Help Consider how Bear Valley, a popular ski resort, could use capital budgeting to decide whether the $9 million Spring 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 ici X Data Table (Click the icon to view the future value annuity factor table.) (Click the ic Read the requirements Assume that Bear Valley's managers developed the following estimates concerning a planned expansion to its Spring Park Lodge (all numbers assumed): Requirement 1. What is the project's NPV? Is the investment attractive? Why or why n * 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? Number of additional skiers per day... 123 Average number of days per year that weather conditions allow skiing at Bear Valley Useful life of expansion (in years)...... Average cash spent by each skier per day ............. $ Average variable cost of serving each skier per day .... $ 140 Cost of expansion.......... ...............$ 9,000,000 12% Assume that Bear Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $800,000 at the end of its ten-year life. It has already calculated the average annual net cash inflow per year to be $2,021,136. Print Done Discount rate............................ . Enter any number in the edit fields and then click Check Answer. Print Done