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Robertson Resorts is considering whether to expand its Pagosa Springs Lodge. The expansion will create 24 additional rooms for rent. The following estimates are available:
Robertson Resorts is considering whether to expand its Pagosa Springs Lodge. The expansion will create 24 additional rooms for rent. The following estimates are available: Cost of expansion $ 3,220,000 Discount rate 9% Useful life 20 Annual rental income $ 2,050,000 Annual operating expenses $ 1,600,000 Robertson uses straight-line depreciation and the lodge expansion will have a residual value $2,640,000.
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