Sport Revenue

The Mount Hood Ski Resort is looking to expand its facilities by adding a new ski lift. The initial investment would cost $2,500,000 and would increase annual expenses by $75,000. The new lift would have a useful life of 10 years and a salvage value of $25,000. The increase in skiing capacity would boost revenues by adding 5,000 skiers per year, paying an average of $100 for a lift ticket. Mt. Hood Ski Resorts cost of capital is 6% and is in the 35% tax bracket. What is the net present value of the project?