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: (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.)

Note: Use appropriate factor(s) from the tables provided.

Initial investment (for two hot air balloons)	$ 420,000
Useful life	10	years
Salvage value	$ 50,000
Annual net income generated	$ 37,800
BBSs cost of capital	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.

2.) Payback period.

Note: Round your answer to 2 decimal places.

3.) Net present value (NPV).

Note: Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.

4.) Recalculate the NPV assuming BBS's cost of capital is 15 percent.

Note: Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.