Posted: April 20th, 2022

Acct310 IP5

Question Assignment description

Contemplate the next situation:Deer Valley Lodge, a ski resort within the Wasatch Mountains of Utah, has plans to finally add 5 new chairlifts. Suppose that one raise prices $2 million, and getting ready the slope and putting in the raise prices one other $1.three million. The raise will permit 300 further skiers on the slopes, however there are solely 40 days a yr when the additional capability will probably be wanted. (Assume that Deer Valley Lodge will promote all 300 raise tickets on these 40 days.) Operating the brand new raise will price $500 a day for your entire 200 days the lodge is open. Assume that the raise tickets at Deer Valley price $55 a day. The brand new raise has an financial lifetime of 20 years.Assume that the before-tax required price of return for Deer Valley is 14%. Compute the before-tax NPV of the brand new raise and advise the managers of Deer Valley about whether or not including the raise will probably be a worthwhile funding. Present calculations to help your reply. Assume that the after-tax required price of return for Deer Valley is eight%, the revenue tax price is 40%, and the MACRS restoration interval is 10 years. Compute the after-tax NPV of the brand new raise and advise the managers of Deer Valley about whether or not including the raise will probably be a worthwhile funding. Present calculations to help your reply. What subjective components would have an effect on the funding determination? You may view a gift worth desk right here.Please submit your project.For help along with your project, please use this desk your textual content, Net sources, and all course supplies.Your project will probably be graded in accordance with the next standards. Click on right here to view the grading rubric.This project may also be assessed utilizing the Frequent Assessment standards supplied right here.

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