Refer to the Wolf Valley Data Set in E12-34A. Data in E12-34A. Consider how Wolf Valley, a

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Refer to the Wolf Valley Data Set in E12-34A.


Data in E12-34A.

Consider how Wolf Valley, a popular ski resort, could use capital budgeting to decide whether the $8 million Brook Park Lodge expansion would be a good investment.

Requirements
1. What is the project’s NPV? Is the investment attractive? Why or why not?
2. Assume that the expansion has no residual value. What is the project’s NPV? Is the investment still attractive? Why or why not?

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