Consider how Pine ValleyPine Valley, a popular ski resort, could use capital budgeting to decide whether the $9 million StreamStream Park Lodge expansion would be a good investment.

Assume that Pine ValleyPine Valley's managers developed the following estimates concerning a planned expansion to its

StreamStream Park Lodge (all numbersassumed):

Number of additional skiers per day. . . . . . . . . . . . . . .	118
Average number of days per year that weather
conditions allow skiing at Pine Valley. . . . . . . . .	160
Useful life of expansion (in years). . . . . . . . . . . . . . . .	10
Average cash spent by each skier per day. . . . . . . . .	$235
Average variable cost of serving each skier per day. . .	$135
Cost of expansion. . . . . . . . . . . . . . . . . . . . . . . . . . .	$9,000,000
Discount rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10%

Assume that Pine ValleyPine Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $500,000 at the end of its ten-year life. It has already calculated the average annual net cash inflow per year to be $1,888,000.

What is the projects NPV?

Net present value of expansion = ????