Robertson Resorts is considering whether to expand their Pagosa Springs Lodge. The expansion will create 24 additional rooms for rent. The following estimates are available: $3,200,000 Cost of expansion Discount rate Useful life Annual rental income Annual operating expenses 20 $2,000,000 $1,550,000 Robertson uses straight-line depreciation and the lodge expansion will have a residual value of $2,600,000. Required: 1. Calculate the annual net operating Income from the expansion 2. Calculate the annual net cash inflow from the expansion 3. Calculate the ARR. (Round your answer to 2 decimal places.) 4. Calculate the payback period (Round your answer to 1 decimal place.) 5. Calculate the NPV. (Future Value of $1. Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $11 (Use appropriate factor(s) from the tables provided. Do not round Intermediate calculations. Round your final answer to nearest whole dollar amount.) 1 2. Annual Operating Income Annual Net Cash Inflow ARR Payback Period NPV I years