K Consider how Smith Valley Stream Park Lodge could use capital budgeting to decide whether the $13,000,000 Stream Park Lodge expansion would be a good investment. Assume Smith Valley's managers developed the following estimates concerning the expansion: (Click the icon to view the estimates.) (Click the icon to view additional information.) Years Years 1-10 Year 10 Calculate the net present value of the expansion. (Enter any factor amounts to three decimal places, X.XXX. Round to the nearest whole dollar.) Net Cash Annuity PV Factor PV Factor (i=12%, Inflow (i=12%, n=10) n=10) More info Year 0 Present value of annuity Present value of residual value Total PV of cash inflows Initial investment Net present value of expansion Assume that Smith Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $600,000 at the end of its ten-year life. They have already calculated the average annual net cash inflow per year to be $2,842,290. Print Done X (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 NPV (round to nearest dollar)? Is the investment attractive? Why or why not? Data table Present Value Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Smith Valley Useful life of expansion (in years) Average cash spent by each skier per day Average variabl cost of serving each skier per day Cost of expansion Discount rate $ 121 skiers 145 days 10 years 238 76 13,000,000 12% eck answer

K \$13,000,000 Slream Park tiodge expelmbion would be a good investment Assume Sm th Wal of? (Cick the igen 10 vien Presect Walue of 51 tabled) franagors developod the lidowing estimates concerning the eupansion (Pick the icon bis vitw the eslimater ] (Cick the ioon bo view sdditionat ingormusion]) What is the projecis Nipy (nound fo nearest dolugi? is whe investment atr actroe? Wry or why not? More info Data table Assume that Smoh Valey unes the straight-line depreciation method and expecta the lodge expansion to havo a residusl value of $600,000 at the ond of ta tenyea ste. They have already calculated the average annual net cash infiow per you to: be S2 EA2 290