Consider how Burlington Ski Lodge could use capital budgeting to decide whether a $$13,000,000$ lodge expansion would be a good investment. Assume Burlington Ski Lodge's managers developed the following estimates concerning the expansion:

View the estimates.

Assume that Burlington Ski Lodge uses the straight$-$line depreciation method and expects the lodge expansion to have a residual value of $$900,000$ at the end of its $10-$year life. The average annual operating income from the expansion is $$1,421,006$ and the depreciation has been calculated as $$1,210,000.$

Calculate the ARR. Round to two decimal places.

Average annual operating income

$+$ Average amount invested

$1=$

$1421006].=\%$

Estimates

$\backslash$table$[[$Number of additional skiers per day,$114$ skiers$],[$Average number of days per year that weather conditions,$147$ days$],[$allow skiing at Burlington Ski Lodge,$10$ years$],[$Useful life of expansion $($in years$),237],[$Average cash spent by each skier per day,$],[$Average variable cost of serving each skier per day,$13,000,000$