1. Accounting rate of return
2. Payback period
3. Net present value
4. Without making any calculations, determine whether the IRR is more or less than 15%
Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines, Various information about the proposed investment follows: Initial investment (2 limos) Useful life Salvage value Annual net income generated LUT's cost of capital $1,380,000 10 years $ 130,000 $ 128,340 159 Assume straight line depreciation method is used. Required: Help LLT evaluate this project by calculating each of the following: 1. Accounting rate of return 2. Payback period 3. Net present value 4. Without making any calculations, determine whether the IRR is more or less than 15% Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate accounting rate of return. (Round your answer to 1 decimal place.) Accounting Role of Relum % Required 2 > Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows: Initial investment (2 limos) Useful life Salvage value Annual net income generated LUT's cost of capital $1,380,000 10 years $ 130,000 $ 128,340 155 Assume straight line depreciation method is used Required: Help LLT evaluate this project by calculating each of the following: 1. Accounting rate of return 2. Payback period 3. Net present value 4. Without making any calculations, determine whether the IRR is more or less than 15% Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate payback period. (Round your answer to 2 decimal places) Payback Porod years Required 1 Required 2 Required 3 Required 4 Calculate net present value. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Cash Outflows and negative amounts should be indicated by a minus sign. Round your "Present Values" to the nearest whole dollar amount.) Show less Table or Calculator Function: Cash Outflow (Beginning of the Year) no i % Present Value Table or Calculator Function: Cash Infow (for Next 10 Years) no % Table Factor Present Value Table or Calculator Function Cash Inflow (for 10th Year) 96 Table Factor Present Value Total Net Present Value Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines, Various information about the proposed investment follows: Initial investment (2 limon) Useful life Salvage value Annual net income generated LLT's cost of capital $1,380,000 10 years $ 130,000 $ 128,340 150 Assume straight line depreciation method is used. Required: Help LLT evaluate this project by calculating each of the following: 1. Accounting rate of return. 2. Payback period 3. Net present value 4. Without making any calculations, determine whether the IRR Is more or less than 15%. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Without making any calculations, determine whether the IRR is more or less than 15% IRR
