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Unformatted text preview: This material is produced by the SI Program at Arizona State University student success .asu.edu { collaborative peerled structured group study SI Assume that Cherry Valley’s managers developed the following estimates concerning the expansion (all numbers assumed): Number of additional skiers per day 122 Average number of days per year that weather conditions allow skiing at Cherry Valley 162 Useful life of the expansion in years 9 Average Cash spent by each skier per day $245 Average variable cost of serving each skier per day $135 Cost of expansion $10,000,000 Discount rate 10% Tax Rate 40% Assume that Cherry valley uses the straightline depreciation method and expects the lodge expansion to have a residual value of $950,000 at the end of it’s nine year life. 1) Compute the Payback Period and the ARR 2) Calculate the project’s NPV....
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This note was uploaded on 02/28/2011 for the course ACC 241 taught by Professor Karengeiger during the Fall '08 term at ASU.
 Fall '08
 KarenGeiger
 Managerial Accounting

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