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The question 10 points) possible Submit fes Consider how Root Valley Stream Park Lodge could use capital budgeting to decide whether the $12,500,000 Stream Park

The question 10 points) possible Submit fes Consider how Root Valley Stream Park Lodge could use capital budgeting to decide whether the $12,500,000 Stream Park Lodge expansion would be a good investment. Assume Root Valley's managers developed the following estimates conceming the expansion (Click the loon to view the estimates) Read the requirements Requirement 1. Compute the average annual net cash inflow from the expansion The average annual net cash inflow from the expansion Requirement 2. Compule the average annual operating income from the expansion The average annual cperating income from the expansion Data table Number of additional skiers per day 121 skers Average number of days per year that weather conditions 144 days allow skiing at Root Valley Useful site of expansion (in years) years Average cash spent by each skler per day B 248 Average variable cost of serving each skier per day, Cest of expansion Discount rate 12.500.000 14% Assume that Root Very uses the stranghene depreciation method and expect the lodge expansion to have a residual value of $1.000.000 at the end of Print Done x

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