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Robertson Resorts is considering whether to expand its Pagosa Springs Lodge. The expansion will create 2 4 additional rooms for rent. The following estimates are
Robertson Resorts is considering whether to expand its Pagosa Springs Lodge. The expansion will create additional rooms for rent. The following estimates are available:
Cost of expansion $
Discount rate
Useful life
Annual rental income $
Annual operating expenses $
Robertson uses straightline depreciation and the lodge expansion will have a residual value $
Required:
Calculate the annual net operating income from the expansion.
Calculate the annual net cash inflow from the expansion.
Calculate the ARR.
Note: Round your answer to decimal places.
Calculate the payback period.
Note: Round your answer to decimal place.
Calculate the NPVFuture Value of $Present Value of $ Future Value Annuity of $ Present Value Annuity of $
Note: Use appropriate factors from the tables provided. Do not round intermediate calculations. Round your final answer to nearest whole dollar amount.
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