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Calculate the payback for the project

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Question - Use capital budgeting to decide whether the $13.500,000 expansion is a good investment by using the following information.

Use the following information to calculate the payback for the project, the ARR, the NPV, and the IRR. Is this a good investment? Why or why not?

Residual value is $1,000,000 at the end of its 10 year life.

Number of additional skiers per day will be 117 skiers

Average number of days/year that the weather is good for skiing is 142 days

Average cash spent by each skier per day $236

Average variable cost of serving each skier per day $76

Discount rate 10%.

Reference no: EM132436058

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