Consider how

Cherry ValleyCherry$$Valley$,$

a popular ski$$ resort, could use capital budgeting to decide whether the

$ $8\mathrm{.}65$$$8\mathrm{.}65$

million

SpringSpring

Park Lodge expansion would be a good investment.

View the expansion estimates.

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Assume that

Cherry ValleyCherry$$Valley

uses the$$ straight$-$line depreciation method and expects the lodge expansion to have a residual value of

$ $650$ comma $000$$$650,000$

at the end of its

eighteight$-$year

life.

Read the requirements.

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Question content area bottom

Part $1$

Requirement $1.$ Compute the average annual net cash inflow from the expansion.

First enter the$$ formula, then compute the average annual net cash inflow from the expansion. $($Round your answer to the nearest$$ dollar.$)$

$$

$$

$$

$=$

Average annual net cash inflow

$$

$$

$$

$=$

$$

Part $2$

Requirement $2.$ Compute the average annual operating income from the expansion.

First enter the$$ formula, then compute the average annual operating income from the expansion.$($Round your answer to the nearest$$ dollar.$)$

$$

$$

$$

$=$

Average annual operating income from asset

$$

$-$

$$

$=$

$$

Part $3$

Requirement $3.$ Compute the payback period.

First enter the$$ formula, then compute the payback period. $($Enter amounts in$$ dollars, not millions. Round your answer to two decimal$$ places.$)$

$$

$$

$$

$=$

Payback period

$$

$$

$$

$=$

$$

years

Part $4$

Requirement $4.$ Compute the ARR.

First enter the$$ formula, then compute the accounting rate of return. $($Enter amounts in$$ dollars, not millions. Enter your answer as a percent rounded to two decimal$$ places.$)$

$$

$$

$$

$=$

Accounting rate of return

$$

$$

$$

$=$

$$

$\%$