document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=791678>Question 791678</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Can you help me with this? I calculated the first part, but I am struggling with this problem. If anyone can help me I would be so grateful!\r<BR>\n" );
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document.write( "Deer Valley Lodge, a ski resort in the Wasatch Mountains of Utah, has plans to eventually add five new chairlifts. Suppose that one lift costs $2 million, and preparing the slope and installing the lift costs another $1.3 million. The lift will allow 300 additional skiers on the slopes, but there are only 40 days a year when the extra capacity will be needed. (Assume that Deer Valley Lodge will sell all 300 lift tickets on those 40 days.) Running the new lift will cost $500 a day for the entire 200 days the lodge is open. Assume that the lift tickets at Deer Valley cost $55 a day. The new lift has an economic life of 20 years.<BR>\n" );
document.write( "1.Assume that the before-tax required rate of return for Deer Valley is 14%. Compute the before-tax NPV of the new lift and advise the managers of Deer Valley about whether adding the lift will be a profitable investment. Show calculations to support your answer.<BR>\n" );
document.write( "ACCT 310 Managerial Accounting										<BR>\n" );
document.write( "Unit 5 IP Template										<BR>\n" );
document.write( "Name:	Gina Lawter									<BR>\n" );
document.write( "										<BR>\n" );
document.write( "	Deer Valley Lodge Ski Resort									<BR>\n" );
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document.write( "										<BR>\n" );
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document.write( "Determine the total investment			$2,000,000 	+	$1,300,000 	=	$3,300,000 			<BR>\n" );
document.write( "   for one (1) lift			cost of a lift		Prep & install		 Total investment 			<BR>\n" );
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document.write( "Calculate the annual cash inflow				X		X		=		<BR>\n" );
document.write( " (anticipated inflow from the 			# of skiers		Days used		cost of lift ticket		annual cash inflow	<BR>\n" );
document.write( "    lift tickets based on total skiers)							per day			<BR>\n" );
document.write( "										<BR>\n" );
document.write( "Calculate the annual cash outflow				X		=				<BR>\n" );
document.write( "(projected outflow based on			# days to 		Cost to run		annual cash outflow			<BR>\n" );
document.write( "  cost to run the lift)			run lift		per day					<BR>\n" );
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document.write( "PV of cash flows @ 14%		(		-		) X		=		<BR>\n" );
document.write( "			annual cash		annual cash		PV of an 		PV of cash	<BR>\n" );
document.write( "			inflow		outflow		annuity of $1		flows @ ___%	<BR>\n" );
document.write( "										<BR>\n" );
document.write( "NPV				-		=				<BR>\n" );
document.write( "			PV of cash		total		NPV			<BR>\n" );
document.write( "			flows @ ____%		investment					<BR>\n" );
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document.write( "Recommendation:										<BR>\n" );
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document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #479682 by </B><A HREF=/tutors/aboutme.mpl?userid=psbhowmick><B>psbhowmick(878)</B></A><img src=\"/images/stars/stars-11.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=psbhowmick><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=psbhowmick><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=479682\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> If you need complete solution for this assignment with Excel then let me know. Cheers! </SPAN>\n" );
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