Data Table 116 skiers 148 days 10 years Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Kyler 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 77 13,000,000 10% scur af Under the assumption that the expansion would have a residual value of $600,000, the managers calculated the payback period to be 4.5 years, the ARR to be 24.68%, the average annual operating income to be $1,678,560, the average amount invested to be $6,800,000, and the average annual net cash inflow to be $2,918,560 Assume that Kyler Valley uses the straight-line depreciation method and now expects the lodge expansion to have zero residual value at the end of its ten-year life. Requirements 5 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 Kyler Valley screens its potential capital investments using the following decision criteria: 5.4 years Maximum payback period Minimum accounting rate of return 17.85 % Will Kyler Valley consider this project further or reject it? Print Done Consider how Kyler Valley Stream Park Lodge could use capital budgeting to decide whether the 513,000,000 Stream Park Lodge expansion would be a good Investment. Assume Kyler 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 bestutamen Id ind Requirement 1. Will the payback change? Explain your answer. Recalculate the payback if changes. Round to one decimal place. Select the formula to calculate the payback period Amount invested Expected annual net cash inflow Payback The payback will continue to be years. the computation of the payback and the payback Method The residual value cash flows that occur after the payback period