Consider how Preston 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 Preston Valley's managers developed the following estimates concerning the expansion: (Click the icon to view the estimates.) Assume that Preston 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 ten-year life. The average annual operating income from the expansion is $1,653,850 and the depreciation has been calculated as $1,265,000. Calculate the ARR. Round to two decimal places. Average annual operating income 7175000 Average amount invested ARR + 1653850 23 % K Consider how Preston Valley Stream Park Lodge could use capital budgeting to decide not the $13,500, Stream Park Lodge expansion would be a good investment. Assume Preston Valle anagers developed th Data table lodge expansion to ha income from the expa Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Preston Valley Useful life of expansion (in years) Average cash spent by each skier per day 122 skiers 145 days 10 years $ 241 ARR Average variable cost of serving each skier per day 76 23% 13,500,000 Cost of expansion Discount rate 8% Checkans K Consider how Preston 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 Preston Valley's managers developed the following estimates concerning the expansion: Click the icon to view the estimates.) Assume that Preston 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 ten-year life. The average annual operating income from the expansion is $1.653,850 and the depreciation has been calculated as $1,265,000. Calculate the ARR. Round to two decimal places. Average annual operating income 7175000 Etext pages Get more help + Average amount invested 1653850 ARR 23% Clear all Check