Comideshow McKg Valley Brook Park Lodge could use capital Bating to decide whether the $11.500.000 book Park Lodge expansion would be a good investment McKnight Valley's manas devped the Following is concerning the expansion (Click the icon to view the estimates) Click the icon to view additional information) Read the requirements Requirement. We the payback change? Explain your awer Recalculate the payback changes Round to one decimal place Select the formule to calculate the payback period Payback The payback wil The residual value the computation of the payback and the payback method cash flows that occur after the payback period Requirement 2. Will the projects ARR change? Explain your answer Recalculate ARR changes. Round to two decimal places Select the formato calculate the AR ARR The ARR w ARR 0 More Info - X - to zero tion expense residual ial capital 0 years Under the assumption that the expansion would have a residual value of $950,000, the managers calculated the payback period to be 3.9 years, the ARR to be 26.04%, the average annual operating income to be $1,621,220, the average amount invested to be $6,225,000, and the average annual net cash inflow to be $2,939,970 Assume that McKnight Valley uses the straight-line depreciation method and now expects the lodge expansion to have zero residual value at the end of its eight-year life 2.00 % and the ion criteria M Print Done i Data Table . 118 skiers tic a Number of additional skiers per day Average number of days per year that weather conditions allow skiing at McKnight Valley Useful life of expansion (in years) Average cash spent by each skier per day Average variable cost of serving each skier per day Cost of expansion Discount rate 151 days 8 years 242 $ 77 11,500,000 10% Requirements . 1. 2. Will the payback change? Explain your answer. Recalculate the payback if it changes. Round to one decimal place. Will the project's ARR change? Explain your answer. Recalculate ARR if it changes. Round to two decimal places. Assume McKnight Valley screens its potential capital investments using the following decision criteria: 3. 5.0 years Maximum payback period Minimum accounting rate of return 12.00 % Will McKnight Valley consider this project further or reject it