What's the project's NPV and is the investment still attractive? Why or why not?

Consider how Hope Valley, a popular ski resort, could use capital budgeting to decide whether the $8.5 million Stream Park Lodge expansion would be a good investment. : (Click the icon to view the expansion estimates.) 5 (Click the icon to view the present value annuity factor table.) (Click the icon to view the present value factor table.) (Click the icon to view the future value annuity factor table.) 5(Click the icon to view the future value factor table.) Read the requirements. Requirement 1. What is the project's NPV? Is the investment attractive? Why or why not? Calculate the net present value of the expansion. (Round your answer to the nearest whole dollar. Use parentheses or a minus sign for a negative net present value.) Net present value of expansion $ 1,336,014 Is the investment attractive? Why? The expansion is an attractive project because its NPV is positive Requirement 2. Assume the expansion has no residual value. What is the project's NPV? Is the investment still attractive? Why or why not? Calculate the project's NPV. (Round your answer to the nearest whole dollar. Use parentheses or a minus sign for a negative net present value.) Net present value of expansion $ i Requirements 1. What is the project's NPV? Is the investment attractive? Why or why not? 2. Assume the expansion has no residual value. What is the project's NPV? Is the investment still attractive? Why or why not? Print Print Done Done] Data Table Assume that Hope Valley's managers developed the following estimates concerning a planned expansion to its Stream Park Lodge (all numbers assumed): 117 I S ). . . . . . . . . . . . . A Number of additional skiers per day...... Average number of days per year that weather conditions allow skiing at Hope Valley 165 Useful life of expansion (in years)... 10 Average cash spent by each skier per day ........... 237 Average variable cost of serving each skier per day .... $ 142 Cost of expansion........ .........$ 8,500,000 Discount rate. 14% Assume that Hope Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $1,000,000 at the end of its ten-year life. It has already calculated the average annual net cash inflow per year to be $1.833.975. D ISCOUTIL lale..................................... Print Print Done Done 1 Reference R 12% 0.893 1.690 2.402 3.037 3.605 Present Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 5.795 5.601 5.417 5.242 5.076 4.917 4.623 4.355 6.728 6.472 6.230 6.002 5.786 5.582 5.206 4.868 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 8.566 8.162 7.786 7.435 7.108 6.802 6.247 5.759 9.471 8.983 8.530 8.111 7.722 7.360 6.710 6.145 10.368 9.787 9.253 8.760 8.306 7.139 6.495 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 13.004 12.106 11.296 | 10.563 9.899 9.295 8.244 7.367 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.606 | 18.046 | 16.351 14.877 13.590 | 12.462 11.470 | 9.818 8.514 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 | 25.808 22.396 | 19.600 17.292 | 15.372 13.765 | 11.258 9.427 32.835 27.355 23.115 19.793 17.159 | 15.046 11.925 | 9.779 8% ovo AWN- 14% 0.877 1.647 2.322 2.914 3.433 3.889 4.288 4.639 4.946 5.216 5.453 5.660 5.842 6.002 6.142 6.623 6.873 7.003 7.105 4.111 4.564 4.968 5.328 5.650 5.938 6.194 6.424 6.628 6.811 7.469 7.843 8.055 8.244 16% 0.862 1.605 2.246 2.798 3.274 3.685 4.039 4.344 4.607 4.833 5.029 5.197 5.342 5.468 5.575 5.929 6.097 6.177 6.233 18% 0.847 1.566 2.174 2.690 3.127 3.498 3.812 4.078 4.303 4.494 4.656 4.793 4.910 5.008 5.092 5.353 5.467 5.517 5.548 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 4.327 4.439 4.533 4.611 4.675 4.870 4.948 4.979 4.997 7.887 Print Done i Reference Reter Present Value of $1 10% 0.909 0.826 0.751 0.683 0.621 16% 0.862 0.743 0.641 0.552 0.476 20% 0.833 0.694 0.579 0.482 0.402 0.823 0.822 0.335 0.711 Periods 1% 2% 3% 4% 5% 6% 10.990 | 0.980 | 0.971 | 0.962 | 0.952 0.943 0.980 0.961 0.943 0.925 0.907 0.890 0.971 0.942 0.915 0.889 0.864 0.840 0.961 0.924 0.888 0.855 0.792 0.951 0.906 0.863 0.784 0.747 0.942 0.888 0.837 0.790 0.746 0.705 0.933 0.871 0.813 0.760 0.665 0.923 0.853 0.789 0.731 0.677 0.627 0.914 0.837 0.766 0.703 0.645 0.592 0.905 0.820 0.744 0.676 0.614 0.558 0.896 0.804 0.722 0.650 0.585 0.527 0.887 0.788 0.701 0.625 0.557 0.497 0.879 0.681 0.601 0.530 0.469 0.870 0.758 0.661 0.577 0.505 0.442 0.861 0.743 0.642 0.555 0.481 0.417 0.820 0.673 0.554 0.456 0.377 0.312 0.780 0.610 0.478 0.375 0.295 0.233 0.742 0.552 0.412 0.308 0.231 0.174 40 0.672 0.453 0.307 0.208 0.1420.097 8% 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463 0.429 0.397 0.368 0.340 0.315 0.564 0.513 0.467 0.424 0.386 12% 14% 0.893 0.877 0.797 0.769 0.712 0.675 0.636 0.592 0.567 0.519 0.507 0.456 0.452 0.400 0.404 0.351 0.361 0.308 0.322 0.270 0.287 0.237 0.257 0.208 0.229 0.182 0.205 0.160 0.183 0.140 0.104 0.073 0.059 0.038 0.033 0.020 0.0110.005 18% 0.847 0.718 0.609 0.516 0.437 0.370 0.314 0.266 0.225 0.191 0.162 0.137 0.116 0.099 0.084 0.037 0.016 0.007 0.001 0.773 0.354 0.305 0.263 0.227 0.195 0.168 0.145 0.125 0.108 0.051 0.024 0.012 0.003 0.350 0.319 0.290 0.263 0.239 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.026 0.010 0.004 0.001 0.215 0.146 0,099 0.046 0.149 0.092 0.057 0.022 Print Print Done Done i Reference Periods 6% 16% 1.000 2.160 3.506 5.066 6.877 5.637 1% 1.000 2.010 3.030 4.060 5.101 6.152 7.214 8.286 9.369 10.462 11.567 12.683 13.809 14.947 16.097 22.019 28.243 34.785 48.886 1.000 2.020 3.060 4.122 5.204 6.308 7.434 8.583 9.755 10.950 12.169 13.412 14.680 15.974 17.293 24.297 32.030 40.568 60.402 3% 1.000 2.030 3.091 4.184 5.309 6.468 7.662 8.892 10.159 11.464 12.808 14.192 15.618 17.086 18.599 26.870 36.459 47.575 75.401 4% 1.000 2.040 3.122 4.246 5.416 6.633 7.898 9.214 10.583 12.006 13.486 15.026 16.627 18.292 20.024 29.778 41.646 56.085 95.026 Future Value of Annuity of $1 5% 8% 10% 12% 1.000 1.000 1.000 1.000 1.000 2.050 2.060 2.080 2.100 2.120 3.153 3.184 3.246 3.310 3.374 4.310 4.375 4.506 4.641 4.779 5.526 5.867 6.105 6.353 6.802 6.975 7.336 7.716 8.115 8.142 8.394 8.923 9.487 10.089 9.549 9.897 10.637 11.436 12.300 11.027 11.491 12.488 13.579 14.776 12.578 13.181 14.487 15.937 17.549 14.207 14.972 16.645 18.531 20.655 15.917 16.870 18.977 21.384 24.133 17.713 18.882 21.495 24.523 28.029 19.599 21.015 24.215 27.975 32.393 21.579 23.276 27.152 31.772 37.280 33.066 36.786 45.762 57.275 72.052 47.727 54.865 73.106 98.347 133.334 66.439 79.058 113.283 164.494 241.333 120.800 154.762 259.057 442.593767.091 14% 1.000 2.140 3.440 4.921 6.610 8.536 10.730 13.233 16.085 19.337 23.045 27.271 32.089 37.581 43.842 91.025 181.871 356.787 1,342.025 8.977 11.414 14.240 17.519 21.321 18% 20% 1.000 1.000 2.180 2.200 3.572 3.640 5.215 5.368 7.154 7.442 9.442 9.930 12.142 12.916 15.327 16.499 19.086 20.799 23.521 25.959 28.755 32.150 34.931 39.581 42.219 48.497 50.818 59.196 60.965 72.035 146.628 186.688 342.603 471.981 790.948 | 1,181.882 4,163.213 7,343.858 25.733 30.850 36.786 43.672 51.660 115.380 249.214 530.312 2,360.757 Print Print Done Done