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S26-12 (similar to) Question Help (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Consider how White Valley River Park Lodge could use capital budgeting to decide whether the $12,000,000 River Park Lodge expansion would be a good investment. Assume White Valley's managers developed the following estimates concerning the expansion: (Click the icon to view the estimates.) (Click the icon to view additional information.) What is the project's NPV (round to nearest dollar)? Is the investment attractive? Why or why not? 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 PV Factor Present Annuity PV Factor (i=12%, n=8) Years Inflow (i=12%, n=8) Value 1-8 Present value of annuity 8 Present value of residual value Total PV of cash inflows 0 Initial investment Enter any number in the edit fields and then click Check Answer. ? 1 part remaining Clear All Check Answer 117 skiers Number of additional skiers per day Average number of days per year that weather conditions allow skiing at White 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 151 days 8 years 241 78 12,000,000 Discount rate 12% Assume that White Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $500,000 at the end of its eight-year life. They have already calculated the average annual net cash inflow per year to be $2,879,721. Print Done Present Value of $1 Periods 2% 4% 1 2 3 1% 0.990 0.980 0.971 0.961 0.951 0.980 0.961 0.942 0.924 0.906 3% 0.971 0.943 0.915 0.888 0.863 0.962 0.925 0.889 0.855 0.822 5% 0.952 0.907 0.864 0.823 0.784 6% 0.943 0.890 0.840 0.792 0.747 7% 0.935 0.873 0.816 0.763 0.713 8% 0.926 0.857 0.794 0.735 0.681 9% 0.917 0.842 0.772 0.708 0.650 10% 0.909 0.826 0.751 0.683 0.621 12% 0.893 0.797 0.712 0.636 0.567 14% 0.877 0.769 0.675 0.592 0.519 15% 0.870 0.756 0.658 0.572 0.497 16% 0.862 0.743 0.641 0.552 0.476 18% 0.847 0.718 0.609 0.516 0.437 20% 0.833 0.694 0.579 0.482 0.402 4 5 6 7 8 9 10 0.942 0.933 0.923 0.914 0.905 0.888 0.871 0.853 0.837 0.820 0.837 0.813 0.789 0.766 0.744 0.790 0.760 0.731 0.703 0.676 0.746 0.711 0.677 0.645 0.614 0.705 0.665 0.627 0.592 0.558 0.666 0.623 0.582 0.544 0.508 0.630 0.583 0.540 0.500 0.463 0.596 0.547 0.502 0.460 0.422 0.564 0.513 0.467 0.424 0.386 0.507 0.452 0.404 0.361 0.322 0.456 0.400 0.351 0.308 0.270 0.432 0.376 0.327 0.284 0.247 0.410 0.354 0.305 0.263 0.227 0.370 0.314 0.266 0.225 0.191 0.335 0.279 0.233 0.194 0.162 11 12 13 14 0.896 0.887 0.879 870 0.804 0.788 0.773 758 0.722 0.701 0.681 n661 0.650 0.625 0.601 577 0.585 0.557 0.530 0505 0.527 0.497 0.469 442 0.475 0.444 0.415 388 0.429 0.397 0.368 340 0.388 0.356 0.326 299 0.350 0.319 0.290 0263 0.287 0.257 0.229 205 0.237 0.208 0.182 160 0.215 0.187 0.163 141 0.195 0.168 0.145 125 0.162 0.137 0.116 ongg 0.135 0.112 0.093 0078 Present Value of Ordinary Annuity of $1 Periods 1 2 1% 0.990 1.970 2.941 3.902 4.853 2% 0.980 1.942 2.884 3.808 4.713 3% 0.971 1.913 2.829 3.717 4.580 4% 0.962 1.886 2.775 3.630 4.452 5% 0.952 1.859 2.723 3.546 4.329 6% 0.943 1.833 2.673 3.465 4.212 7% 0.935 1.808 2.624 3.387 4.100 8% 0.926 1.783 2.577 3.312 3.993 9% 0.917 1.759 2.531 3.240 3.890 10% 0.909 1.736 2.487 3.170 3.791 12% 0.893 1.690 2.402 3.037 3.605 14% 0.877 1.647 2.322 2.914 3.433 15% 0.870 1.626 2.283 2.855 3.352 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2.174 2.690 3.127 20% 0.833 1.528 2.106 2.589 2.991 4 5 6 7 8 9 10 5.795 6.728 7.652 8.566 9.471 5.601 6.472 7.325 8.162 8.983 5.417 6.230 7.020 7.786 8.530 5.242 6.002 6.733 7.435 8.111 5.076 5.786 6.463 7.108 7.722 4.917 5.582 6.210 6.802 7.360 4.767 5.389 5.971 6.515 7.024 4.623 5.206 5.747 6.247 6.710 4.486 5.033 5.535 5.995 6.418 4.355 4.868 5.335 5.759 6.145 4.111 4.564 4.968 5.328 5.650 3.889 4.288 4.639 4.946 5.216 3.784 4.160 4.487 4.772 5.019 3.685 4.039 4.344 4.607 4.833 3.498 3.812 4.078 4.303 4.494 3.326 3.605 3.837 4.031 4.192 11 12 13 10.368 9.787 9.253 11.255 10.575 9.954 12.134 11.348 10.635 8.760 9.385 9.986 8.306 8.863 9.394 7.887 8.384 8.853 7.499 7.943 8.358 7.139 7.536 7.904 6.805 7.161 7.487 6.495 6.814 7.103 5.938 6.194 6.424 5.453 5.660 5.842 5.234 5.421 5.583 5 724 5.029 5.197 5.342 4.656 4.793 4.910 4.327 4.439 4.533 14 420 1010 11 00 40502 Oon 005 0 716 0214 7 700 7 227 0 nnn BACO Enno A011