Consider how Monterey Snow Park Lodge could use capital budgeting to decide whether a $12,000,000 lodge expansion would be a good investment. Assume Monterey Snow Park Lodge's managers developed the following estimates conceming the expansion View the estimates Assume that Monterey Snow Park Lodgeuses the straight-line depreciation method and expects the lodge expansion to have a residual value of $500,000at the end of its 10eThe average annual operating income from the expansion is $1,613,894and the depreciation has been calculated as $1,150,000 Calculate the ARR. Round to two decimal places Amount invested Annual depreciation Average amount invested Average annual net cash inflow Average annual operating income Residual value ARR %6 nsider how Monterey Snow Park Lodge could use capital budgeting to decide whether a $12,000,000 lodge expansion would be a good investment. Assume Mi nagers developed the following estimates conceming the expansion: w the estimates. ume that Monterey Snow Park Lodgeuses the straight-line depreciation method and expects the lodge expansion to have a residual value of $500,000 at the rating income from the expansion is $1,613,894and the depreciation has been calculated as $1,150,000. culate the ARR. Rou Estimates Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Monterey Snow Park Lodge 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 Print Done 119 skiers 147 days 10 years 242 84 12,000,000 8%