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)	$	414,000
Useful life		7	years
Salvage value	$	43,000
Annual net income generated		36,846
BBSs cost of capital		10	%

Assume straight line depreciation method is used.

What is the accounting rate of return?? ROUND YOUR ANSWER TO 1 DECIMAL PLACE.

What is the payback period?? ROUND YOUR ANSWER TO 2 DECIMAL PLACES.

What is the net present value? DO NOT ROUND INTERMEDIATE CALCULATIONS. NEGATIVE AMOUNT SHOULD BE INDICATED BY A MINUS SIGN. ROUND YOUR ANSWER TO NEAREST WHOLE DOLLAR.

Recalculate the NPV assuming the cost of capital is 13 percent. DO NOT ROUND INTERMEDIATE CALCULATIONS. NEGATIVE AMOUNT SHOULD BE INDICATED BY A MINUS SIGN. ROUND THE FINAL ANSWER TO THE NEAREST WHOLE DOLLAR.