A) Products is considering producing toy action figures and sandbox toys The products require different specialized machines, each costing $1 million Each machine has a five year life and zero residual value The two products have different patterns of predicted net cash inflows Annual Net Cash Inflows Year Toy action figure project Sandbox toy project Year 1 $306,650 $530,000 Year 2 306,650 370,000 Year 3 306,650 320,000 Year 4 306,650 230,000 Year 5 306,650 40,000 Total $1,533,250 $1,490,000 Toy Universe will consider making capital investments only if the payback period of the project is less than 3 5 years and the ARR exceeds 8 Calculate the sandbox toy project's ARR If the sandbox toy project had a residual value of $175,000, would the ARR change Explain and recalculate if necessary Does this investment pass Toy Universe's ARR screening rule B) Products is considering producing toy action figures and sandbox toys The products require different specialized machines, each costing $1 1 million Each machine has a five year life and zero residual value The two products have different patterns of predicted net cash inflows Annual Net Cash Inflows Year Toy action figure project Sandbox toy project Year 1 $336,700 $530,000 Year 2 336,700 370,000 Year 3 336,700 320,000 Year 4 336,700 275,000 Year 5 336,700 50,000 Total $1,683,500 $1,545,000 Toy Universe will consider making capital investments only if the payback period of the project is less than 3 5 years and the ARR exceeds 8 Calculate the toy action figure project's ARR If the toy action figure project had a residual value of $150,000, would the ARR change Explain and recalculate if necessary Does this investment pass Toy Universe's ARR screening rule

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A) Products is considering producing toy action figures and sandbox toys. The products require different specialized machines, each costing $1 million. Each machine has a

A) Products is considering producing toy action figures and sandbox toys. The products require different specialized machines, each costing $1 million. Each machine has a five-year life and zero residual value. The two products have different patterns of predicted net cash inflows.

	Annual Net Cash Inflows
Year	Toy action figure project	Sandbox toy project
Year 1. . . . . . . . . . .	$306,650	$530,000
Year 2. . . . . . . . . . .	306,650	370,000
Year 3. . . . . . . . . . .	306,650	320,000
Year 4. . . . . . . . . . .	306,650	230,000
Year 5. . . . . . . . . . .	306,650	40,000
Total	$1,533,250	$1,490,000

Toy Universe will consider making capital investments only if the payback period of the project is less than 3.5 years and the ARR exceeds 8%.

Calculate the sandbox toy project's ARR. If the sandbox toy project had a residual value of $175,000, would the ARR change? Explain and recalculate if necessary. Does this investment pass Toy Universe's ARR screening rule?

Products is considering producing toy action figures and sandbox toys. The products require different specialized machines, each costing $1.1 million. Each machine has a five-year life and zero residual value. The two products have different patterns of predicted net cash inflows.

	Annual Net Cash Inflows
Year	Toy action figure project	Sandbox toy project
Year 1. . . . . . . . . . .	$336,700	$530,000
Year 2. . . . . . . . . . .	336,700	370,000
Year 3. . . . . . . . . . .	336,700	320,000
Year 4. . . . . . . . . . .	336,700	275,000
Year 5. . . . . . . . . . .	336,700	50,000
Total	$1,683,500	$1,545,000

Toy Universe will consider making capital investments only if the payback period of the project is less than 3.5 years and the ARR exceeds 8%.

Calculate the toy action figure project's ARR. If the toy action figure project had a residual value of $150,000, would the ARR change? Explain and recalculate if necessary. Does this investment pass Toy Universe's ARR screening rule?