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3. Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows: $1,260,000 Initial investment (2 limos)
3. Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows: $1,260,000 Initial investment (2 limos) Useful life Salvage value Annual net income generated LLT's cost of capital 10 years S 130,000 114,660 14% Assume straight line depreciation method is used Required Help LLT evaluate this project by calculating each of the following: 1. Accounting rate of return. (Round your percentage answer to 1 decimal place.) Answer is complete but not entirely correct. 14.00% 2. Payback period. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Payback Period 10.98Years
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