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Consider how Golden Valley, a popular ski resort, could use capital budgeting to decide whether the $8 million Waterfall Park Lodge expansion would be a good investment. E: (Click the icon to view the expansion estimates.) (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.) 2 (Click the icon to view the future value factor table.) Read the requirements. C. 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 1636466 Data table Assume that Golden Valley's managers developed the following estimates concerning a planned expansion to its Waterfall Park Lodge (all numbers assumed): Number of additional skiers per day ...... 122 Average number of days per year that weather conditions allow skiing at Golden Valley 159 Useful life of expansion (in years) 9 Average cash spent by each skier per day. $ 243 Average variable cost of serving each skier per day . $ 142 Cost of expansion.... $ 8,000,000 Discount rate..... 12% Assume that Golden Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $900,000 at the end of its nine-year life. It has already calculated the average annual net cash inflow per year to be $1,959,198. Video Etext pages Get more help Print Done

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