Smith Valley Snow Park Lodge Problem Consider how Smith Valley Snow Park Lodge could use capital budgeting to decide whether the $13,500,000 Snow Park Lodge expansion would be a good investment. Assume Smith Valley's managers developed the following estimates concerning the expansion: Number of additional skiers per day . . . . . . . . Average number of days per year that weather conditions allow skiing at Smith Valley.. . . . . . Average cash spent by each skier per day .. . . . . . . . Average variable cost of serving each skier per day... Cost of expansion Discount rate .. . . 142 10 236 76 $13,500,000 10% $ Assume that Smith Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $1,000,000 at the end of its 10-year life 1. Compute the average annual net cash inflow from the expansion. 2. Compute the average annual operating income from the expansion. Compute the cash payback for the expansion project. Round to one decimal place. 4. Calculate the average rate of return (ARR). Round to two decimal places. 5. What is the project's NPV (round to the nearest dollar)? Is the investment attractive? Why or why not? (round to nearest dollar)? Is the investment attractive? Why or why not? project's internal rate of return (IRR)? Is the investment attractive? Why or 6. Assume the expansion has no residual value. What is the project's NPV 7. Continue to assume that the expansion has no residual value. What is the why not