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Balloons By Sunset (BBS) is considering the purchase of two new hot alr balloons so that it can expand its desert sunset tours. Varlous information
Balloons By Sunset (BBS) is considering the purchase of two new hot alr balloons so that it can expand its desert sunset tours. Varlous information about the proposed investment follows: (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annulty of $1. .) Note: Use approprlate 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: 1. Accounting rate of return. Note: Round your answer to 2 declmal places. 2. Payback perlod. Note: Round your answer to 2 decimal places. 3. Net present value (NPV). Note: Do not round Intermedlate calculatlons. Negatlve amount should be Indlcated by a minus sign. Round the final answer to nearest whole dollar. 4. Recalculate the NPV assuming BBS's cost of capital is 11 percent. Note: Do not round Intermedlate calculatlons. Negatlve amount should be Indlcated by a minus sign. Round the final answer to nearest whole dollar. TABLE 11.3A Future Value of an Annuity of $1
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