Subject: accounting -33Robertson Resorts is considering whether to expand its Pagosa Springs Lodge. The expansion will create 24 additional rooms for rent.The following estimates are availableCost of expansionDiscount rateUseful lifeAnnual rental income$ 2,050,000Annual operating expenses$ 1,600,000Robertson uses straight-line depreciation and the lodge expansion will have a residual value $2,640,000.Required:1. Calculate the annual net operating income from the expansion.2. Calculate the annual net cash inflow from the expansion.3. Calculate the ARR.Note: Round your answer to 2 decimal places.4. Calculate the payback period.1 Annual Operating Income2. Annual Net Cash Inflow3 ARR$ 3,220,0004. Payback Period5 NPVNote: Round your answer to 1 decimal place.5. Calculate the NPV (Future Value of $1. Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1)Note: Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round your final answer tonearest whole dollar amount.98years20

-33 Robertson Resorts is considering whether to…

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Subject: accounting

-33
Robertson Resorts is considering whether to expand its Pagosa Springs Lodge. The expansion will create 24 additional rooms for rent.
The following estimates are available
Cost of expansion
Discount rate
Useful life
Annual rental income
$ 2,050,000
Annual operating expenses
$ 1,600,000
Robertson uses straight-line depreciation and the lodge expansion will have a residual value $2,640,000.
Required:
1. Calculate the annual net operating income from the expansion.
2. Calculate the annual net cash inflow from the expansion.
3. Calculate the ARR.
Note: Round your answer to 2 decimal places.
4. Calculate the payback period.
1 Annual Operating Income
2. Annual Net Cash Inflow
3 ARR
$ 3,220,000
4. Payback Period
5 NPV
Note: Round your answer to 1 decimal place.
5. Calculate the NPV (Future Value of $1. Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1)
Note: Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round your final answer to
nearest whole dollar amount.
98
years
20

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