Robinson Hardware is adding a new product line that will require an investment of $1,454,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $320,000 the first year, $300,000 the second year, and $260,000 each year thereafter for eight years. Compute the payback period. Round to one decimal place. The payback in years is Consider how Preston Valley Brook Park Lodge could use capital budgeting to decide whether the $12,500,000 Brook Park Lodge expansion would be a good investment. Assume Preston Valley's managers developed the following estimates concerning the expansion: E: (Click the icon to view the estimates.) (Click the icon to view additional information.) (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? Calculate the net present value of the expansion. (Enter the factor to three decimal places, X.XXX. Round your calculations to the nearest whole dollar.) Net Cash Annuity PV Factor PV Factor (i=8%, Years Inflow (i=8%, n=7) n=7) Present Value x Data Table Years 1 - 7 Present value of annuity Year 0 Initial investment Net present value of expansion 114 skiers 143 days Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Preston 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 Discount rate $ More Info -X 7 years 238 87 12,500,000 8% Assume that Preston Valley uses the straight-line depreciation method and expects the lodge expansion to have no residual value at the end of its seven-year life. The project's average annual net cash inflow per year is expected to be $2,461,602. Print Done Print Done