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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

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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: $ 420,000 Initial Investment (for two hot air balloons) Useful lite Salvage value Annual net inconucrated BBS cost of capital 10 years $50,00 37.00 11% Assume straight line depreciation method is used Required: Help BBS evaluate this project by calculating each of the following: 1. Accounting rate of return. Accounting Raoof Ratum 2. Payback period. (Round your answer to 2 decimal places.) PDK Years 3. Net present value (NPV). Future Value of $1. Present Value of $1. Future Value Anulty of S1, Present Value Annuity of $1. (Use appropriate factor(s) from the tobles provided. Round the final answer to nearest whole dollor.) Net Prosent Value 4. Recalculate the NPV assuming BBS's cost of captal is 15 percent. (Euture Value of $1. Present Value of $1. Future Value Annuitval $1. Present Value Annuity of $1) (Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollor.) Net Present Value

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