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:

Initial investment (for two hot air balloons)	$	316,000
Useful life		7	years
Salvage value	$	43,000
Annual net income generated		25,280
BBSs cost of capital		11	%

Assume straight line depreciation method is used.

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:

Required: Help BBS evaluate this project by calculating each of the following 1. Accounting rate of return. (Round your answer to 1 decimal place.) Accounting Rate of Return 2. Payback period. (Round your answer to 2 decimal places.) Payback Period Years 3. Net present value (NPV). (Future Value of $1, Present Value of $1, Round the final answer to nearest whole dollar.) : k Net Present Value 4. Recalculate the NPV assuming BBS's cost of capital is 14 percent. should be indicated by a minus sign. Round the final answer to n Net Present Value