Question

Consider how McKnight Valley River Park Lodge could use capital budgeting to decide whether the $13,000,000 River Park Lodge expansion would be a good investment. Assume Mcknight Valley's managers developed the following stimates concerning the expansion (Click the icon to view the estimates) Read the requirements XIANbozo e Requirement 1. Compute the average annual net cash inflow from the expansion Data Table - The average annual net cash inflow from the expansion is 120 skiers 150 days Number of additional skiers per day Average number of days per year that weather conditions allow skiing at McKnight Valley Useful life of expansion in years) Average cash spent by each skier per day Average vanable cost of serving each skier per day Cost of expansion Discount rate $ 246 75 13.000.000 Assume that Mcknight Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $850,000 at the end of its nine-year life Tiger Requirements Print Done 1. Compute the average annual net cash inflow from the expansion 2. Compute the average annual operating income from the expansion Print Done