Question content area top

Part $1$

Consider how

Hope Valley

$,$

a popular ski$$ resort, could use capital budgeting to decide whether the

$ $9\mathrm{.}1$

million

Blizzard

Park Lodge expansion would be a good investment.

View the expansion estimates.

LOADING...

Assume that

Hope Valley

uses the$$ straight$-$line depreciation method and expects the lodge expansion to have a residual value of

$ $900$ comma $000$

at the end of its

nine

$-$year

life.

Read the requirements.

LOADING...

Question content area bottom

Part $1$

Requirement $1.$ Compute the average annual net cash inflow from the expansion.

First enter the$$ formula, then compute the average annual net cash inflow from the expansion. $($Round your answer to the nearest$$ dollar.$)$

Average net cash inflow per day

$$

Number of ski days per year

$=$

Average annual net cash inflow

$$13,462$

$$

$$155$

$=$

$$2,086,610$

Part $2$

Requirement $2.$ Compute the average annual operating income from the expansion.

First enter the$$ formula, then compute the average annual operating income from the expansion.$($Round your answer to the nearest$$ dollar.$)$

Average annual net cash inflow

$$

Annual depreciation expense

$=$

Average annual operating income from asset

$$2,086,610$

$-$

$910000$

$=$

$$