Consider how Mcknight Valley Stream Park Lodge could use capital budgeting to decide whether the $13,500,000 Stream Park Lodge expansion would be a good investment. Assume McKnight Valley's managers developed the following estimates concerning the expansion: (Click the icon to view the estimates.) (Click the icon to view additional information.). Read the requirements. Requirement 1. Will the payback change? Explain your answer. Recalculate the payback if it changes. Round to one decimal place. Select the formula to calculate the payback period. Payback Data Table to 119 skiers 143 days 8 years 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 $ 247 76 13,500,000 14% Print Done nt 1. i More Info rmula Under the assumption that the expansion would have a residual value of $950,000, the managers calculated the payback period to be 4.6 years, the ARR to be 18.56%, the average annual operating income to be $1,341,157, the average amount invested to be $7,225,000, and the average annual net cash inflow to be $2,909,907 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. Print Done X i Requirements od 1. Will the payback change? Explain your answer. Recalculate the payback if it changes. Round to one decimal place. 2. Will the project's ARR change? Explain your answer. Recalculate ARR if it changes. Round to two decimal places. 3. Assume McKnight Valley screens its potential capital investments using the following decision criteria: 3. Maximum payback period Minimum accounting rate of return 4.9 years 12.00 % Will Mcknight Valley consider this project further or reject it? Print Done