Consider how Burlington Ski Lodge could use capital budgeting to decide whether a $15,000,000 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 $750,000 at the end of its 10-year life. The average annual operating income from the expansion is $1,335,510 and the depreciation has been calculated as $1,425,000. Calculate the ARR. Round to two decimal places. lator Ask my instructor Estimates ARR % Number of additional skiers per day 114 skiers Average number of days per year that weather conditions allow skiing at Burlington Ski Lodge 145 days Useful life of expansion (in years) 10 years Average cash spent by each skier per day 245 Average variable cost of serving each skier per day 78 15,000,000 Cost of expansion 12% Discount rate Print Done - Clear all Check answer