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Consider how Root Valley Spring Park Lodge could use capital budgeting to decide whether the $12.000.000 Spring Park Lodge expansion would be a good investment Assume Root Valley's managers developed the following estimates concerning the expansion mok the icon to www the estimates (Clathe icon to view additional formation (Click the icon to view Present Value of table) (Click the loon to view Presente Ordinary Annuity of 51 ) What is the project's IRR is the investment attractive? Why or why not? The internal rate ofretum (IRR) of the expansion The project is since it wa vetur than the company's 14% hurdrolo Present Value of $1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Period 1 0.990 0.9800.97110.962 0.952 0.943 0.935 0.926 0.9170.909 0.893 0.877 0.870 0.862 0.847 0.833 Period 2 0.980 0.961 0.9430.925 0.9070.890 0.873 0.857 0.8420.826 0.797 0.769 0.7560.743 0.7180.694 Period 3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.7940.772 0.751 0.712 0.675 0.658 0.641 0,609 0.579 Period 40.9610.9240.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.636 0.592 0.572 0.5520.5160.482 Period 5 0 951 0.906 0.863 0.822 0.784 0.7470.713 0.6810650 0.621 0.5670.519 0.4970.476 0.437 0.402 Period 6 0.942 0.888 0.837 0.790 0.746 0.705 0.6660.630 0.596 0.564 0.507 0.456 0.432 0.410.0.370 0.335 Period 7 0.933 0.871/0.813 0.7600 7100.665 0.623 0.5830.547 0.513 0.452 0.400 0.376 0.354 0.3140 279 Period 8 0.923 0.853 0.789 0.731 0.677 0.6270.582 0540 0.502 0.467 0.404 0.351 0.327 0.305 0 266 0233 Period 90.914 0.837 0.766 0.703 0.645 0.592 0,544 0500 0.460 0.424 0,361 0.308 0 2840.263 0.225 0.194 Period 0.905 0.820 0.744 0.676 0.614 0.558 0.5080 463 0.422 0.386 0.322 0.270 0.2470.227 0.1910 162 10 Period 110.896 0.804 0 722 0.650 0.585 0527 0.475 0.429 0.388 0.3500 287 0237 0.215 0 195 0.162 0.135 Period 0.887 0.788 0.701 0.625 0.557 0.4970444 0.397 0.356 0.319 0.257 0 2080.187 0.168 0137 0.112 12 Period 0.879 0.7730 681 0.601 0.530 0.469 0.415 0.368 0 326 0.290 0.229 0.182 0.163 0 1450 116 0.093 13 Period 0.8700.758 0.661 0.5770.505 0.442 0.388 0.340 0.299 0.263 0.205 0 1600 1410 125 0.099 0.078 14 Period 10.861 0.743 0.642 0555 0.481 0.417 0.362 0.315 0.275 0.239 0.1830 140 0.1230 108 0,084 0.065 15 Period 0.853 0.7280.6230.534 0,458 0.394 0.3390292 0.252 0 218 0.163 0.1230 1070093 0.071 0.054 16 Period 0.844 0.71410.605 0,5130.436 0.371 0.317 0.270 (0.231 0.198 0.146 0.108 0.0930.0800 060 0.045 17 Period 10.836 0.700 0.587 0.494 0.416 0.350 0.296 0.250 0.212 0.1800 1300095 0.081 0.069 0.051 0.038 18 Period 0.828 0.686 0.570 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.116 0.0830.070 10.060 0.043 0.031 19 Period 0.8200.673 0.554 0.456 0.377 0.312 0.2580 215 0.1780 149 1040.073 0.061 0.051 0.037 0.026 120 Period 0.811 0.660 0.538 0.439 0 3590.294 0 242 0.1990.1640.135 0.093 0.064 0.053 0.044 0.031 0.022 21 Period 0.803 0.6470522 0.422 0342 0278 0.226 0.1840 1500 123 0.0830.056 0.046 0.0380 026 0.018 Future Value of $1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% Period 1 1.010 1.020 1030 1.040 1.050 1.060 1.070 1.080 1.090 1.100 1.120 1.140 1.150 Period 2. 1020 1.040 1.061 1.082 1.103 1.124 1.145 1.166 1.188 1210 1.254 1.300 1 323 Period 3 1.030 1.061 1.093 1.125 1.158 1.191 1.225 1.260 1295 1331 1.405 1.482 1521 Period 4 1.041 1.082 1.126 1.170 1.216 1.262 1.311 1.360 1.412 1.464 1.5741.689 1.749 Period 5 1.051 1.104 1.159 1.217 1.276 1.338 1.403 1.469 1.539 1.611 1.762 1.925 2011 5 Period 6 1.062 1.126 1.1941.265 1.3401.419 1.501 1.587 1.677 1772 1.9742 195 2.313 Period 7 1.072 1.149 1.230 1.316 1.407 1.504 1.606 1714 1.828 1.949 2.211 2.502 2660 Period 8 1.083 1.1721.267 1.369 1.477 1.594 1718 1.851 1.993 2.144 2.476 2.853 3.059 Period 9 1.094 1.195 1.305 1423 1.551 1689 1.838 1.999 2.172 2.358 2.7733.252 3.518 Period 10 1.105 | 1.219 1.3441480 1.629 1.791 1.967 2.159 2.367 2.594 3.106 3.707 4.046 Period 11 1.116 1.243 1.384 1.539 1.710 1.898 2.105 2.332 2.580 2.853 3.479 4 226 4.652 Period 12 1.127 1.268 1.426 1.601 1.796 2.0122.252 2.518 2.8133.138 3.896 4818 5.350 Period 131.138 1 294 1.469 1.665 1.886 2.133 2.410 2.720 3.066 3.452 4.363 5.492 6.153 Period 14 1149 1.319 1.513 1.732 1.980 2.261 2.579 2.937 3.342 3.798 4.887 6.261 7.076 Period 15 1.161 1.346 1.558 1.801 2.079 2.397 2.759 3.172 3.642 4.177 5.474 71388.137 Period 16 1 173 1373 1.605 1.873 2.183 2540 2.952 3.426 3.970 4.595 6.130 8. 1379 358 Period 17 1.184 1.400 1.653 1.948 2.292 2.693 3.1593.700 4.328 5.054 6.8669.276 10.76 Period 18 1 196 1.428 1702 2.0262.4072 854 3.380 3.996 4.717 5.560 7690 10.58 12.38 Period 19 1.208 1.457 1754 2.107 2.527 3.026 3.617 4 316 5.142 6.116 8613 12.06 14.23 Period 20 1220 1.486 1.806 2.191 2.653 3.207 3.870 4.661 5.604 6.727 9.646 13.74 16:37 Period 21 1.232 1.516 1.860 2.279 2.7863.400 4.1415.034 6.1097.400 10.80 15.67 18.82 Period 22 1245 1.546 1.916 2.370 2.925 3.604 4.430 5.437 6.659 8 140 12.10 17.86 21.64 Period 23 1257 1.577 1974 2.465 3.072 3.820 4.741 5.8717 258 8.954 13.55 20.36 24.89 Period 24 1 270 1.608 2.0332.563 3.225 4.049 5.072 6.341 7.911 9.850 15 18 23 21 28.63 Period 25 1282 1.64120942.666 3.386 4.292 5.427 6.8488.623 10.83 17 00 26.46 3292 Period 26 1.295 1.673 2.1572.772 3.556 4.549 5.8077.3969.399 11.92 19.04 30.1737 86 Period 27 1.308 1.707 2.221 2.8833.733 4822 6.214 7.988 10.25 13.11 21.32 34.39 43.54 Period 28 1.321 1.741 2.288 2.999 3.920 5.112 6.649 8.627 11 17 14 42 23.88 39,20 50.07 Period 29 1.335 1776 23573.119 4 116 5.418 7 1149.317 12 17 15.86 26.75 44.69 57 58 Period 301.348 1.811 2.427 3.243 4.3225.743 7612 10.06 13.27 17.45 29.96 50.95 66 21 Period 40 1.489 2.2083 2624 801 7040 10.29 14.97 21 72 31.41 45.26 93.05 188.9 2679 Period 50 1.645 2.692 4.384 7 107 11.47 18.42 29 46 46.90 74.36 117.4 289.0 700 2 1,084 Present Value of Ordinary Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 Period 2 1.970 1.942 1913 1.886 1.859 1833 1.808 1.783 1759 1736 1.690 1647 1.626 1.605 1.566 1.528 Period 3 2.9412.884 2.8292.775 2.723 2.6732.624 2.577 2.531 2.487 2.402 2.322 2.283 2.246 2.1742.106 Period 4 3.902 3.808 3.717 3.630 3.546 3.465|3.3873.3123 2403.1703.037 2.914 2.855 2.798 2 690 2.589 Period 5 4.853 4713 4.580 4.452 4.3294212 4.100|3.9933.890 3.791 3.605 3.433 3.352 3.274 3.127 2.991 Period 6 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.111 3.889 3.784 3.685 3.498 3.326 Period 7 6.728 6.472 6230 6.002 5.786 5.582 5389 5.206 5.033 4.868 4.564 4288 4.160 4.039 3.812 3.605 Period 8 7.652 7325 7020 6.7336.463 6.210 5.971 5.747 5.535 5335 4.968 4.639 4487 4 344 4.078 3.837 Period 9 8.566 8.162 7.786 7.435 7 108 6.802 6.515 6.247 5.995 5.759 5.328 4.946 4772 4.607 4 303 4031 Period 10 9.471 8.9838.530 8.111 7.7227.360 7024 6.710 6.418 6.145 5.6505.216 5,019 4833 4 494 4192 Period 1110.368 9.7879 253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.938 5.453 5 234 5.029 4656 4 327 Period 12 11.25510,575 9.954 9.385 8.863 8.384 7.943 7536 Z 161 6814 6.194 5660 5.421 5.197 4793 4.439 Period 1312. 134 11.348 10.6359.986 9.3948.853 8 358 7.904 7.487 7 1036.424 5.842 5,583 5.342 4910 4533 Period 1413.004 12.106 11 296 10.563 9.899 9.295 8.745 824477867 3676.6286.002 5.724 5.468 5008 4611 Period 1513.8651284911.938 11.11810.3809712 9.108 8.5598.061 7606 6.811 6 142 5.847 5,575 5.092 4.675 Period 1614 71813,57812.561 11.65210.838 10.106 9,447 8.851 8.313 7 824 6.9746.265 5,954 5.669 5.162 4730 Period 1715,562 14 292 13.166 12.16611 274 10.477 9.763 9.122 8.544 8.022 7.1206,373 6047 5.749 5.222 4775 Period 1816.398 14.992 13.754 12.659 11 690 10.828 10.0599.3728.756 8. 2017.250 6.467 6.128 5.818 5.273 4812 Period 1917 22615,678 14.32413.1341208511.158 10.336 9.6048.950 8.3657.3666.550 6.198 58775.3164844 Period 2018.046 16.35 14.877 13.590 12.462 11.470 10.594 9.818 9.129 8.5147469 6.623 6.259 5.929 5.353 4 870 Period 2118,857 17 01115.415 14.029 12.821 11.764 10.836 10.017 9 292 8.64975626,687 6.312 5973 5.384 4 891 Period 22 19.660 17 658 15.937 14.451 13.16312.042 11,061 10 2019,442 8.772 7.645 6.743 6.3596.0115.410 4.909 Period 2320.45618.292 16.44414 857 13.489 12.303 11 272 10.371 95808 8837718 6.792 6.3996.044 5.432 4 925 Period 2421 24318.914 16.93615.247 13.799 12.550 11.469 10.529 9.707 8.985 7.784 6 835 6.434 6.073 5.451 4.937 Period 25|22.023 19.52317 41315.622 14 094 12.783 11.65410.675 9.8239.077 7.8436.873 6.464 6.097 5,467 4.948 Period 2622.79520 121 17.877 15 98314.37513.003 11.82610,810 9.929 9.1617.8966.906 6.491 6.118 5 480 4956 Period 27|23.560 20.707 18 32716 330 14.64313 211 11.987|10.93510.027 9 2377943 6.935 6.5146.136 5.492 4.964 Period 2824 31621.28118.764 16.66314.89813.406 12.137 1105110 116 9 3077.984 6.9616.534 6.152 5.502 4.970 Period 2925.066 21.844 19.188 16.984 15.14113.59112 278 11.158 10.1989.3708.022 6.983 6551 6 166 5.510 4975 Period 3025 80822 396 19 600 17.292 15 372 13.765 12.409 11 258 10.274 9.4278.055 7.003 6.566 6.1775.517 4.979 Period 40 32.83527355 23 115 19.79317.15915,04613.332 11.925/10.757 9 7798.244 7.105 6.642 6 233 5.548 4997 Period 50 39.196 31.424 25 730 21.48218 25615.762 13.801 12 233 10.962 9.915 8.3047133 6.661 6 246 5.554 4.999 $ 1% Future Value of Ordinary Annuity of $1 Periods 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% Period 1 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Period 2 2.010 2020 2.0302.040 2050 2.060 2.070 2.080 2.090 2.100 2.1202.140 2.150 Period 3 3.0303.060 3.091 3.122 3.1533.1843.215 3.246 3.278 3.310 3.374 3.440 3.473 Period 4 4.060 4.122 4.184 4.246 4.3104.375 4.440 4.506 4.573 4.641 4.779 4.921 4.993 Period 5 5.101 5.2045.3095.416 5.5265.637 5.751 5.867 5.985 6.105 6.353 6.610 6.742 Period 6 6.152 6.308 6.468 6.633 6.802 6.975 7.1537.336 7.523 7.7168.115 8.536 8.754 Period 7 7.21417.434 7.662 7.898 8.142 8.394 8.654 8.923 9.2009.487 10.09 10.73 11.07 Period 8 8.2868.583 8.8929.214 9.5499.897 10.260 10.64 11.03 11.44 12.30 13.23 13.73 Period 9 9.369 9.755 10.16 10.58 11.03 | 11.49 11.98 12.49 13.02 13.58 14.78 16.09 16.79 Period 10 10.46 10.95 11.46 12.01 12.58 13.18 13.82 14.49 15.19 15.94 17.55 19.34 20.30 Period 11 11.57 12.17 12.81 13.49 14.21 14.97 15.78 16.65 17.56 18.53 20.65 23.04 24.35 Period 12 12.68 13.41 14.19 15.03 15.92 16.87 17.89 18.98 20.14 21.38 24.1327 27 29.00 Period 13 13.81 14.68 15.62 16.63 17.71 18.88 20.14 21.50 22.95 24.52 28.03 32.09 34.35 Period 14 14.95 15.97 17.09 18.29 19.60 21.02 22.55 24.21 26.02 27.98 32.39 37.58 40.50 Period 15 16.10 17.29 18.60 20.02 21.582328 25.13 27.15 29.36 31.77 37.28 43.84 47.58 Period 16 17.2618.64 20.16 21.82 23.66 25.67 27.89 30.32 33.00 35.95 42.75 50.98 5572 Period 17 18,43 20.01 21.7623.70 25.84 28 21 30.84 33.75 36.9740.54 48.88 59.12 65.08 Period 18 19.61 21.41 23.41 25.65 28.1330.91 34.00 37.45 41.30 45.60 55.75 68.39 75.84 Period 19 20.81 22.84 25.12 27.67 30.54 33.76 37.38 41.45 46.02 51 16 63.44 78.97 88.21 Period 20 22.02 24.30 26.87 29.7833.07 36.79 41.00 45.76 51.16 57.28 72.05 91.02 102.4 Period 21 23 24 25.78 28.68 31.9735.72 39.99 44.87 50.42 56.76 64.00 81.70 104.8 118.8 Period 22 24.47 27.30 30.54 34.25 38.51 43.39 49.01 55.46 62.87 71.40 92.50 120.4 137.6 Period 23 25.72 28.85 32.45 36.62 41.4347.00 53.4460.89 69.53 79.54104.6 138.3 159.3 Period 24 26.97 30.42 34.43 39.08 44.50 50.82 58.18 66.76 76.7988.50 118.2158.7 184.2 Period 25 28.24 32.03 36.46|41.65 47.73 54.86 63.25 73.11 84.70 98.35 133.3 181.9 212.8 Period 26 29.53 33.67 38.55 44.31 51.11 59.16 68.68 79.95 93.32 109.2 150.3 208.3245.7 Period 27 30.82 35.34 40.71 47.08 54.6763.7174.48 87.35 102.7 1211 169.4 238.5 283.6 Period 28 32.13 37.05 42.93 49.97 58.40 68.53 80.70 95.34 113.0 134.2 190.7 272.9 327.1 Period 29 33.45 38.79 45.22 52.97 62.32 73.64 87.35 104.0 124.1148.6 214.6 312.1 377.2 Period 30 34.78 40.57 47.58 56.08 66.44 79.06 94.46 113.3 136.3 164.5 241.3356.8 434.7 Period 40 48.89 60.4075.40 95.03 120.8 154.8 199.6 259.1 3379 4426 767.1 1,3421.779 Period 50 64.46 84.58 112.8 152.7209.3 290.3 406.5 573.8 815.1 1.164 2.400 4.995 7.218 he project is since it will cama return than the company's 14% hurdle rate - X Data Table More Info 122 skers 146 days Assume that Root 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 is expected to have an average au net cash intow of $2,930.900 The NPV of the expansion is expected to be $502305 7 years Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Root Valley Useful life of expansion in years) Average cash spent by each skier per day Average variable cont of serving each sker per day Cost of expansion Discount rate $ 243 78 12.000.000 14% Print Done Print Done