The owner of a ski resort is considering installing a new ski lift that will cost $850,000. Expenses for operating and maintaining the lift are estimated to be$2,500

per day when operating. The U.S.Weather Service estimates that there is a55%cprobability of90days of skiing weather per year, a 30% probability of 110 days per year, and a 15% probability of 130 days per year. The operators of the resort estimate that an average of450 people will use the lift each day the resort is open, at a fee of $12 each. The owners wish to recover any invested capital within five years and want at least a 20% per year rate of return before taxes. Based on a before-tax analysis, should the lift be installed

Calculate the net annual revenue (i.e., total revenue - total cost) for each scenario.

The net annual revenue based on90 days of skiing weather is _________

The net annual revenue based on110 days of skiing weather is $________

The net anual revenue based on130 days of skiing weather is_______

The expected net annual revenue is_______

The expected PW of installing a new ski lift is

AIF Discrete Compounding; i = 20% Single Payment Uniform Series Compound Compound Sinking Amount Present Amount Present Fund Factor Worth Factor Factor Worth Factor Factor To Find F To Find P To Find F To Find P To Find A Given P Given F Given A Given A Given F FIP PIF FIA PIA 1.2000 0.8333 1.0000 0.8333 1.0000 1.4400 0.6944 2.2000 1.5278 0.4545 1.7280 0.5787 3.6400 2.1065 0.2747 2.0736 0.4823 5.3680 2.5887 0.1863 2.4883 0.4019 7.4416 2.9906 0.1344 2.9860 0.3349 9.9299 3.3255 0.1007 3.5832 0.2791 12.9159 3.6046 0.0774 4.2998 0.2326 16.4991 3.8372 0.0606 5.1598 0.1938 20.7989 4.0310 0.0481 6.1917 0.1615 25.9587 4.1925 0.0385 Capital Recovery Factor To Find A Given P AIP 1.2000 0.6545 0.4747 0.3863 0.3344 0.3007 0.2774 0.2606 0.2481 0.2385