FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
estimates concerning the expansion:
Consider how Rouse Valley Brook Park Lodge could use capital budgeting to decide whether the $11,500,000 Brook Park Lodge expansion would be a good investment. Assume Rouse Valley's managers developed the following
(Click the icon to view the estimates.)
Assume that Rouse Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $600,000 at the end of its ten-year life. The average annual operating income from the expansion is
$1,594,675 and the depreciation has been calculated as $1,090,000.
Calculate the ARR. Round to two decimal places.
ARR
Data table
%
- X
Number of additional skiers per day
Average number of days per year that weather conditions
allow skiing at Rouse Valley
115 skiers
145 days
Useful life of expansion (in years)
Average cash spent by each skier per day
10 years
242
Average variable cost of serving each skier per day
811
Cost of expansion
11,500,000
12%
Discount rate
Print
Done
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Transcribed Image Text:estimates concerning the expansion: Consider how Rouse Valley Brook Park Lodge could use capital budgeting to decide whether the $11,500,000 Brook Park Lodge expansion would be a good investment. Assume Rouse Valley's managers developed the following (Click the icon to view the estimates.) Assume that Rouse Valley uses the straight-line depreciation method and expects the lodge expansion to have a residual value of $600,000 at the end of its ten-year life. The average annual operating income from the expansion is $1,594,675 and the depreciation has been calculated as $1,090,000. Calculate the ARR. Round to two decimal places. ARR Data table % - X Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Rouse Valley 115 skiers 145 days Useful life of expansion (in years) Average cash spent by each skier per day 10 years 242 Average variable cost of serving each skier per day 811 Cost of expansion 11,500,000 12% Discount rate Print Done
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