Internal Rate of Returm Method for a Service Company The Riverton Company, announced a $396,322 million expansion of lodging properties, ski lifts, and terrain in Park City, Utah. Assume that this investment is estimated to produce $71,000 million in equal annual cash flows for each of the first seven years of the project life. Present Value of an Annuity of $1 at Compound Interest Year 696 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1626 1.528 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.599 3 4.212 3.791 3.605 3,353 2.991 6 4.917 4355 4.111 3785 3326 2 5.5821 4.868 4.564 4.160 3.605 6.210 5.335 496 4.487 3.837 9. 6.802 5.759 5.320 4772 4.031 10 7360 6.145 5.650 5.019 4.192 a. Determine the expected internal rate of retum of this project for seven years, using the present value of an annuity of $1 table above. b. Identify the uncertainties that could reduce the internal rate of return of this project? Warm weather conditions, or no anow Recessionary economic conditions that reduce the demand for ski holidays Competitor property improvements that phan demand from the project Increased fuel costs that increase the cost of travel to ski resorts, thus reducing demand from nonlocal patrons Industry overbuilding that causes a price war to maintain volume All of these