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Balloons By Sunset ( BBS ) is considering the purchase of two new hot air balloons so that it can expand its desert sunset tours.

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Balloons By Sunset (BBS) is considering the purchase of two new hot air balloons so that it can expand its desert sunset tours. Various
information about the proposed investment follows: (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value
Annuity of $1.)
Note: Use appropriate factor(s) from the tables provided.
Assume straight line depreciation method is used.
Required:
Help BBS evaluate this project by calculating each of the following:
Accounting rate of return.
Note: Round your answer to 2 decimal places.
Payback period.
Note: Round your answer to 2 decimal places.
Net present value (NPV).
Note: Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to
nearest whole dollar.
Recalculate the NPV assuming BBS's cost of capital is 11 percent.
Note: Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to
nearest whole dollar.
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