Consider how Kyler Valley Waterfall Park Lodge could use capital budgeting to decide whether the $13,500,000 Waterfall Park Lodge expansion would be a good investment. Assume Kyler Valley's managers developed the following estimates concerning the expansion:

Data table

Number of additional skiers per day118 skiersAverage number of days per year that weather conditions allow skiing at Kyler Valley149 daysUseful life of expansion (in years)11 yearsAverage cash spent by each skier per day$237Average variable cost of serving each skier per day88Cost of expansion13,500,000Discount rate10%

Assume that Kyler Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $850,000 at the end of its eleven-year life. The average annual operating income from the expansion is $1,469,718 and the depreciation has been calculated as $1,150,000. Calculate the ARR. Round to two decimal places.

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Part 1

=ARR = %