Final answer:
The ski resort can use Net Present Value (NPV) to determine the attractiveness of the million-park lodge expansion. If the NPV is positive, the investment is considered attractive.
Step-by-step explanation:
In order to determine whether the million-park lodge expansion is a good investment, the ski resort can use a capital budgeting technique called Net Present Value (NPV). NPV calculates the present value of cash inflows and outflows associated with the project and compares it to the initial investment. If the NPV is positive, the investment is considered attractive.
In this case, let's assume the park lodge expansion generates annual cash inflows of $200,000 over a period of 10 years and the initial investment is $1 million. Using an appropriate discount rate, we can calculate the NPV as follows:
NPV = (200,000 / (1 + r) ^1) + (200,000 / (1 + r) ^2) + ... + (200,000 / (1 + r) ^10) - 1,000,000
If the calculated NPV is positive, for example, $100,000, it means that the project's expected cash inflows exceed the initial investment, and the ski resort can expect a positive return on the investment. This would make the investment attractive.