Question: It would be great if i could get an answer in 15 min! Consider how Cole Valley Spring Park Lodge could use capital budgeting to

It would be great if i could get an answer in 15 min!It would be great if i could get an answer in 15

Consider how Cole Valley Spring Park Lodge could use capital budgeting to decide whether the $11,500,000 Spring Park Lodge expansion would be a good investment. Assume Cole Valley's managers developed the following estimates concerning the expansion: E: (Click the icon to view the estimates.) (Click the icon to view additional information.) 2 (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) What is the project's IRR? Is the investment attractive? Why or why not? . The internal rate of return (IRR) of the expansion is Data table More info The project is since it will earn a return than the company's 12% hurdle rate. 122 skiers 147 days Assume that Cole Valley uses the straight-line depreciation method and expects the lodge expansion to have no residual value at the end of its eight-year life. The project is expected to have an average annual net cash inflow of $2,797,704. The NPV of the expansion is expected to be $2,398,993. 8 years Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Cole Valley Useful life of expansion (in years) Average cash spent by each skier per day Average variable cost of serving each skier per day Cost of expansion Discount rate $ 242 86 11,500,000 Print Done 12% Print Done Consider how Cole Valley Spring Park Lodge could use capital budgeting to decide whether the $11,500,000 Spring Park Lodge expansion would be a good investment. Assume Cole Valley's managers developed the following estimates concerning the expansion: E: (Click the icon to view the estimates.) (Click the icon to view additional information.) 2 (Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) What is the project's IRR? Is the investment attractive? Why or why not? . The internal rate of return (IRR) of the expansion is Data table More info The project is since it will earn a return than the company's 12% hurdle rate. 122 skiers 147 days Assume that Cole Valley uses the straight-line depreciation method and expects the lodge expansion to have no residual value at the end of its eight-year life. The project is expected to have an average annual net cash inflow of $2,797,704. The NPV of the expansion is expected to be $2,398,993. 8 years Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Cole Valley Useful life of expansion (in years) Average cash spent by each skier per day Average variable cost of serving each skier per day Cost of expansion Discount rate $ 242 86 11,500,000 Print Done 12% Print Done

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