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)	$	383,000
Useful life		7	years
Salvage value	$	47,000
Annual net income generated	$	31,406
BBSs cost of capital		12	%

Assume straight line depreciation method is used.

Required:

Help BBS evaluate this project by calculating each of the following:

1.	Accounting rate of return. (Round your answer to 1 decimal place.)

2.	Payback period. (Round your answer to 2 decimal places.)

3.	Net present value (NPV). (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign.)

4.	Recalculate the NPV assuming BBS's cost of capital is 20 percent. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign.)
	Need 3 and 4. 1 and 2 are correct. Thank you!