Homework: Chapter 12 Homework (required) Score: 0.67 of 1 pt 7 of 9 (5 complete) %E12-33A (similar to) HW Score: 37.819 Qu. Consider how Frost Valley, a popular ski resort, could use capital budgeting to decide whether the $9.5 million Waterfall 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 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 $ Data Table Assume that Frost Valley's managers developed the following estimates concerning a planned expansion to its Waterfall Park Lodge (all numbers assumed): 121 Number of additional skiers per day ............ Average number of days per year that weather conditions allow skiing at Frost Valley e ars) . . . . . . . . . . . . . . . . A Useful life of expansion (in years) Average cash spent by each skier per day .......... 242 Average variable cost of serving each skier per day ... $ 134 Cost of expansion ........... $ 9,500,000 Discount rate 10% Assume that Frost 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 $2,130,084. Print Done