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Please answer the Requirements according to the form (The numbers are not the same). Please make sure your answer is correct. Thanksss Consider how Kyler
Please answer the Requirements according to the form (The numbers are not the same). Please make sure your answer is correct. Thanksss
Consider how Kyler Valley Stream Park Lodge could use capital budgeting to decide whether the $12,000,000 Stream Park Lodge expansion would be a good investment. Assume Kyler Valley's managers developed the following estimates concerning the expansion: (Click the icon to view the estimates.) (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) What is the project's NPV (round to nearest dollar)? Is the investment attractive? Why or why not? (Click the icon to view additional information.) - X Calculate the net prese Data table arest whole dollar.) Years Years 1 - 8 Present 118 skiers Year 8 Present 145 days Total PV 8 years Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Kyler Valley Useful life of expansion (in years) Average cash spent by each skier per day Average variable cost of serving each skier per day Cost of expansion Year 0 Initial in $ 246 Net pres 84 12,000,000 Discount rate 12% ...... More info Assume that Kyler Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $750,000 at the end of its eight-year life. They have already calculated the average annual net cash inflow per year to be $2,771,820. Help me solve ar all Check answer Calculate the net present value of the expansion. (Enter any factor amounts to three decimal places, X.XXX. Round to the nearest whole dollar.) Net Cash Annuity PV Factor PV Factor (i=12%, Years Inflow (i=12%, n=10) n=10) Present Value Years 1 - 10 Present value of annuity $ 3,019,500 5.65 $ 17,060,175 Year 10 Present value of residual value 850,000 0.322 273,700 Total PV of cash inflows 17,333,875 Year 0 Initial investment (12,000,000) Net present value of expansion $ 5,333,875 The expansion is an attractive project because its NPV is positiveStep by Step Solution
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