Bonita Corp. is thinking about opening a soccer camp in southern Ontario. In order to start the camp, the company would need to purchase land, and build four soccer fields and a dormitory-type sleeping and dining facility to house 150 soccer players. Each year, the camp would be run for eight sessions of one week each. The company would hire college soccer players as coaches. The camp attendees would be male and female soccer players aged 12 to 18. Property values in southern Ontario have enjoyed a steady increase in value. It is expected that after using the facility for 20 years, Bonita can sell the property for more than it was originally purchased for. The following amounts have been estimated:

Cost of land $ 300,000
Cost to build dorm and dining facility $ 600,000
Annual cash inflows assuming 150 players and 8 weeks $ 950,000
Annual cash outflows $ 840,000
Estimated useful life 20 years
Salvage value $1,500,000
Discount rate 8%

Calculate the net present value of the project. (For all net present value calculations, if the net present value is negative, show the amount in (parenthesis). Round all answers to 0 decimal places.)

Net present value $

To gauge the sensitivity of the project to these estimates, assume that if only 130 players attend each week, revenues will be $800,000 and expenses will be $770,000.

What is the net present value using these alternative estimates?

Net present value $

Assuming the original facts, what is the net present value if the project is actually riskier than first assumed, and an 11% discount rate is more appropriate?

Net present value $

Assume that during the first five years the annual net cash flows each year were only $45,000. At the end of the fifth year, the company is running low on cash, so management decides to sell the property for $1.3 million. What was the actual internal rate of return on the project? Explain how this return was possible if the camp did not appear to be successful. (Round to 0 decimal places.)

Actual internal rate of return. %