chapter 26 question 2
Splash Planet is considering purchasing a water park in Atlanta, Georgia, for $1,880,000. The new facility will generate annual net cash inflows of residual value. The company uses straight-line depreciation, and its stockholders demand an annual return of 12% on investments of this nature (Click the icon to view the Present Value of $1 table) Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of $1 table.) Read the resurements Requirement 1. Compute the payback the ARR, the NPV, the IRR, and the profitability index of this investment. First, determine the formula and calculate payback (Round your answer to one decimal place, XX) Payback years Next, determine the formula and calculate the accounting rate of return (ARR) (Round the percentage to the nearest tenth percent, XX%) ARR 96 Calculate the net present value (NPV) (Enter any factor amounts to three decimal places, XXXX) Net Cash Annuity PV Factor Present Years Inllow (1-12%, n=8) Value 1-8 Present value of annuity T Choose from any list or enter any number in the input fields and then continue to the next question + Type here to search o N plete Splash Planet is considering purchasing a water park in Atlanta, Georgia, for $1,880,000. The new facility will generate annual net cash inflows of $4 residual value. The company uses straight-line depreciation, and its stockholders demand an annual return of 12% on investments of this nature. (Click the icon to view the Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table) (Click the icon to view Future Value of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of S1 table.) Read the requirements Net Cash Annuity PV Factor Present Years Inflow (i-12%, n-8) Value Present value of annuity 0 Investment Net present value of the investment The IRR (internal rate of return) is between Finally determine the formula and calculate the profitability index (Round your answer to two decimal places, XXX) Profitability index 1-8 Requirement 2. Recommend whether the company should invest in this project DARIA Onlson Planet it in the ninth the Choose from any list or enter any number in the input folds and then continue to the next question HA A The MDR =8) Value 6 Requirements 1. Compute the payback, the ARR, the NPV, the IRR, and the profitability index of this investment 2. Recommend whether the company should invest in this project. your ans Print Done project se the payback period is the operating life, the NPV is the profitability index is on mn continue to the next question N hp) 20% Present Value of $1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% Period 1 0990 0,980 0971 0.962 0.9520.943 09350926 0917 0.909 0.893 08770870 0.862 0847 0833 Period 2 10,980 0961 0943 0.925 0.907 0.8900 873 0.857 0842 0.826 0.797 0.769 0.756 0743 0718 0.694 Period 3 0971 0.942 0915 0.889 0.864 0.8400816 0794 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 Period 4 0.96109240.88808550823 0792 0.763 0.735 0.708 0.683 0.636 0.592 0.5720552 0516 0.482 Period 5 0.951 0.906 0.863 0.822 0.784 0747 0713 0.681 0.650 0.621 0.56705190.497 0.476 0.437 0.402 Period 6 0.942 0.88808370.790 0.746 0.705 0.666 0.630 0.596 0.564 0.507 0.456 0.432 04100370 0.335 Period 7 0.933 08710813 0760 0711 0.665 0.623 0.5830547 0.513 0.4520.400 0.376 0.35403140 279 Period 8 0.923 0.853 0.7890731 0.6770627 0.5820.540 0502 0.467 0.4040351 0.3270 3050.266 0233 Period 9 0.914 0.837 0.766 0.703 0.6450.59205440.500 0.460 0.4240361 0.3080 2840 263 0.225 0.194 Period 10 10.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.322 0.2700 2470 227 0.191 0.162 Period 11 0896 0.8040.722 0650 0.585 0.5270475 0.429 0.388 0.3500 287 0.2370 215 0.195 0.162 0.135 Period 12 0 887 0.788 0.701 0625 0.557 0.497 0.444 0.397 0.356 0.319 0257 0208 0.187 0.168 0.1370.112 Period 13 0.879 0.773 0681 0.601 0530 0469 0.415 0.368 0326 0.290 0.229 0.182 0163 01450 116 0.093 Period 14 0.870 0758 0.661 0.5770.505 0.442 0.3880340 0.299 0.263 0205 0.1600.141 0.125 0.099 0.078 Period 15 0.861 074306420555 0 481 0417 03620315 0.275 0.2390 1830 1400 123 0.10800840065 Period 16 0853 0728062305340458 0394 03390 2920 2520.2180163 0 123 0.107 0.093 0.0710054 Period 17 0844 07140.605 0513 0.436 0371 0.317 0 2700 2310.1980.146 0.108 0.093 0080 0.060 0.045 Period 18 0836 0700 058704940416 03500 2960 250 0 2120 18001300095 00810 069 0.051 0.038 Period 19 08280.68605700475039603310 277 0232 0.1940.164011600830070 0.060 0043 0.031 sh in th pu Print Done Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 Period 16 Period 17 Period 18 Period 19 Future Value of $1 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 1010 1020 1030 1040 1.050 1.060 1.070 1080 1.090 1.100 1.120 1.140 1.150 1.020 1.040 1061 1.0821.103 1.1241.145 1.166 1.188 1.210 1.254 1.300 1.323 1030 1.061 1.093 1.125 1.158 1.191 1225 1260 1.295 1331 1.405 1.482 1.521 1.041 1.082 1.126 1.170 1.216 1.262 1311 1360 1.412 1.464 1.574 1689 1.749 1.051 1.104 1.159 1217 1.2761338 1.403 1.469 1.539 1.611 1.762 1.925 2011 1.062 1.126 1.1941.265 1340 14191501 1587 1.677 1772 1.9742.1952 313 1.072 1.149 1.230 1.316 1.407 1.504 1606 1714 1.828 1.949 2211 2.502 2.660 1.083 1.1721.267 1.369 1477 1.594 1.718 1851 1.99321442476 2853 3.059 1.094 1.195 1.305 1.423 1551 1.689 1838 1999 2172 2358 27733.252 3.518 1.105 1.219 1.3441480 1629 1791 1967 2159 2367 2594 3.106 3.707 4.046 1.116 124313841.539 1.710189821052 3322580 2.853 3.479 4 226 4652 1.127 1268 1.426 1.601 1.796 2012 2 252 2518 2.813 3.138 3.896 4818 5350 1138 1.294 1.469 1665 1886 2 133 2410 2720 30663 452 4363 5.492 6. 153 1.149 1319 15131732 1.980 2.261 2.579 2.937 3.34237984887 62617076 1.161 1346 1.558 1801 2.079 2397 27593 1723 642 4177547471388 137 1.1731373 1605 1.873 2.183 2540 2952 3.426 3 970 4595 6130 8.1379.358 1184 1.400 1653 1.9482292 2.6933 159 3.700 43285.054 6866 9.276 10.76 1.196 142817022026 2 4072 854 3.380 3.996 4717 55607 690 1058 1238 1 208 1.45717542 107 2527 3.02636174316 5.1426.116 861312061423 G Stin C Print Done and o CN in A diati ble. nflow Present Value of Ordinary Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Period 1 0.990 0.980 0.9710.96209520.943 0935 0.926 0917090908930877 0.870 086208470833 Period 2 1.970 1942 1913 1886 1859 1833 1808 1.783 1759 1736 1.6901.647 1626 1605 1.566 1528 Period 3 2941 2884 2829 2775 2723 2673 2624 2.577 2531 2.487 2402 2322 2283 2246 2174 2.106 Period 4 3.902 3808 3.717 3.630 3546 3.465 3.3873.3123 2403.170303729142.855 2798 2690 2.589 Period 5 4853 4713 4.580 4.452 4329 4.212 4.100 3.993 3.890 3.791 3.605 3.43333523274 3.127 2.991 Period 6 5795 5.601 5417 5242 5.076 49174767 4.623 4.486 4355 4111 3.8893.784 3685 3.498 3.326 Period 7 6.728 6.472 6230 6.002 5786 5,582 5389 5.206 5033 486845644.2884160 4,039 3.812 3605 Period 8 76527325 7020 6.733 6.463 6210 5971 5747 5535 5335 4.968 46394 487 4344 4.078 3837 Period 9 8.566 8. 1627.786 7.435 7108 6.802 6515 6.247 5995 5.759 532849464772 4 607 4303 4031 Period 109471 8.9838530 8.111 7.722 7360 7024 6.710 6418 6145 5.650 5 216 5019 4833 4494 4192 Period 11 10 368 9.787 9253 8.760 83067.8877499713968056495 5.938 5453 5234 5029 4656 4327 Period 12 11 255 10.575 9.964 9.38 8.860 943 7.1616.814 5.660 5421 5 19747934439 Period 13 12.134 11348 10635 99869.3948.853 8.358 7.904 7.4877 1036.4245,842 5583 5342 4910 4533 Period 14 13.004 12.106 11 296 10.563 9.8999295 8745824477867 357 6.6286.002 5724 5468 5008 4.611 Period 15 13.86512849 11.938 11.118 10.38097129 108 855980617.606 6.811 6.142 5.847 5.575 5092 4.675 Period 16 1471813.578 12.561 11652 1083810.106 94478 851 8313 7.8246.9746265 59545669 5162 4730 Period 17 15.562 14292 13.166 12 165 11 274 10477 9763 9 12285448.0227 120 6373 6047 5749 5222 4775 Period 18 16 398 14992 13.754 12659 11.690 10.82810059937287568201725064676.128 5818 5273 4812 Period 19 17226 15678 14 324 13134120851115810.336960489508365736665606198 5.87753164844 Olitabil any shou vest in the Print Done the input O : DISC 5 6 & 7 8 9 0 11 E 2 of 3 (3 complete) ) * Reference Future Value of Ordinary Annuity of $1 | Penot %% 345% | 6% 7.8% 99 10% 14 158 100 1000 1000 | 100 1000 | 100 11000 1000 1000 1000 1000 1000 1006 2010 12 020 | 2030 | 2040 12050 | 2060 12070 ) 2080 2990 2100 12120 2140 2150 3030 3.060 | 391 32 3153 3.184 | 3215 |32463278 | 3310 33743 40 3473 40604 12 12.144245| 4310 4375 |4 40 4 506143 44 479 42193 15.161 |5 200 5.39 5.4165526153715751156715985 16.105625316610 16.742 6152 630815468 6.633 680216975 71537336|79771686185361875 7214 | 7.434 7.66217898 18 14218 24 18654 189231900 | 94870 09 63|107 8.266 18 583188929214 1959 997 10 260 10 64 13 11 44 230323 1373 9269 3755| 10.16| 10 58 13| 49 |1 | 249| 13.02 | 13 56 |4 78 16.19679 Period 10 | 10 46 | 106| 2011 12 58 | 18 132 14 49 | 15 15947 55 | 19340 Period | | 11 57 12 17 128|| 13.49 | 4 21 | 14.97 | 15.78 | 166 7 8 18 53 | 20 65 | 23.04 2435 mm 8% 5 &B %%%% 20.87 | 24 25 12 || 20154 | 3375 | 37 36 | 45 4625116 | 65 44 | 7| 82 Print Done 0 Splash Planet is considering purchasing a water park in Atlanta, Georgia, for $1,880,000. The new facility will generate annual net cash inflows of residual value. The company uses straight-line depreciation, and its stockholders demand an annual return of 12% on investments of this nature (Click the icon to view the Present Value of $1 table) Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of $1 table.) Read the resurements Requirement 1. Compute the payback the ARR, the NPV, the IRR, and the profitability index of this investment. First, determine the formula and calculate payback (Round your answer to one decimal place, XX) Payback years Next, determine the formula and calculate the accounting rate of return (ARR) (Round the percentage to the nearest tenth percent, XX%) ARR 96 Calculate the net present value (NPV) (Enter any factor amounts to three decimal places, XXXX) Net Cash Annuity PV Factor Present Years Inllow (1-12%, n=8) Value 1-8 Present value of annuity T Choose from any list or enter any number in the input fields and then continue to the next question + Type here to search o N plete Splash Planet is considering purchasing a water park in Atlanta, Georgia, for $1,880,000. The new facility will generate annual net cash inflows of $4 residual value. The company uses straight-line depreciation, and its stockholders demand an annual return of 12% on investments of this nature. (Click the icon to view the Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table) (Click the icon to view Future Value of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of S1 table.) Read the requirements Net Cash Annuity PV Factor Present Years Inflow (i-12%, n-8) Value Present value of annuity 0 Investment Net present value of the investment The IRR (internal rate of return) is between Finally determine the formula and calculate the profitability index (Round your answer to two decimal places, XXX) Profitability index 1-8 Requirement 2. Recommend whether the company should invest in this project DARIA Onlson Planet it in the ninth the Choose from any list or enter any number in the input folds and then continue to the next question HA A The MDR =8) Value 6 Requirements 1. Compute the payback, the ARR, the NPV, the IRR, and the profitability index of this investment 2. Recommend whether the company should invest in this project. your ans Print Done project se the payback period is the operating life, the NPV is the profitability index is on mn continue to the next question N hp) 20% Present Value of $1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% Period 1 0990 0,980 0971 0.962 0.9520.943 09350926 0917 0.909 0.893 08770870 0.862 0847 0833 Period 2 10,980 0961 0943 0.925 0.907 0.8900 873 0.857 0842 0.826 0.797 0.769 0.756 0743 0718 0.694 Period 3 0971 0.942 0915 0.889 0.864 0.8400816 0794 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 Period 4 0.96109240.88808550823 0792 0.763 0.735 0.708 0.683 0.636 0.592 0.5720552 0516 0.482 Period 5 0.951 0.906 0.863 0.822 0.784 0747 0713 0.681 0.650 0.621 0.56705190.497 0.476 0.437 0.402 Period 6 0.942 0.88808370.790 0.746 0.705 0.666 0.630 0.596 0.564 0.507 0.456 0.432 04100370 0.335 Period 7 0.933 08710813 0760 0711 0.665 0.623 0.5830547 0.513 0.4520.400 0.376 0.35403140 279 Period 8 0.923 0.853 0.7890731 0.6770627 0.5820.540 0502 0.467 0.4040351 0.3270 3050.266 0233 Period 9 0.914 0.837 0.766 0.703 0.6450.59205440.500 0.460 0.4240361 0.3080 2840 263 0.225 0.194 Period 10 10.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.322 0.2700 2470 227 0.191 0.162 Period 11 0896 0.8040.722 0650 0.585 0.5270475 0.429 0.388 0.3500 287 0.2370 215 0.195 0.162 0.135 Period 12 0 887 0.788 0.701 0625 0.557 0.497 0.444 0.397 0.356 0.319 0257 0208 0.187 0.168 0.1370.112 Period 13 0.879 0.773 0681 0.601 0530 0469 0.415 0.368 0326 0.290 0.229 0.182 0163 01450 116 0.093 Period 14 0.870 0758 0.661 0.5770.505 0.442 0.3880340 0.299 0.263 0205 0.1600.141 0.125 0.099 0.078 Period 15 0.861 074306420555 0 481 0417 03620315 0.275 0.2390 1830 1400 123 0.10800840065 Period 16 0853 0728062305340458 0394 03390 2920 2520.2180163 0 123 0.107 0.093 0.0710054 Period 17 0844 07140.605 0513 0.436 0371 0.317 0 2700 2310.1980.146 0.108 0.093 0080 0.060 0.045 Period 18 0836 0700 058704940416 03500 2960 250 0 2120 18001300095 00810 069 0.051 0.038 Period 19 08280.68605700475039603310 277 0232 0.1940.164011600830070 0.060 0043 0.031 sh in th pu Print Done Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 Period 16 Period 17 Period 18 Period 19 Future Value of $1 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 1010 1020 1030 1040 1.050 1.060 1.070 1080 1.090 1.100 1.120 1.140 1.150 1.020 1.040 1061 1.0821.103 1.1241.145 1.166 1.188 1.210 1.254 1.300 1.323 1030 1.061 1.093 1.125 1.158 1.191 1225 1260 1.295 1331 1.405 1.482 1.521 1.041 1.082 1.126 1.170 1.216 1.262 1311 1360 1.412 1.464 1.574 1689 1.749 1.051 1.104 1.159 1217 1.2761338 1.403 1.469 1.539 1.611 1.762 1.925 2011 1.062 1.126 1.1941.265 1340 14191501 1587 1.677 1772 1.9742.1952 313 1.072 1.149 1.230 1.316 1.407 1.504 1606 1714 1.828 1.949 2211 2.502 2.660 1.083 1.1721.267 1.369 1477 1.594 1.718 1851 1.99321442476 2853 3.059 1.094 1.195 1.305 1.423 1551 1.689 1838 1999 2172 2358 27733.252 3.518 1.105 1.219 1.3441480 1629 1791 1967 2159 2367 2594 3.106 3.707 4.046 1.116 124313841.539 1.710189821052 3322580 2.853 3.479 4 226 4652 1.127 1268 1.426 1.601 1.796 2012 2 252 2518 2.813 3.138 3.896 4818 5350 1138 1.294 1.469 1665 1886 2 133 2410 2720 30663 452 4363 5.492 6. 153 1.149 1319 15131732 1.980 2.261 2.579 2.937 3.34237984887 62617076 1.161 1346 1.558 1801 2.079 2397 27593 1723 642 4177547471388 137 1.1731373 1605 1.873 2.183 2540 2952 3.426 3 970 4595 6130 8.1379.358 1184 1.400 1653 1.9482292 2.6933 159 3.700 43285.054 6866 9.276 10.76 1.196 142817022026 2 4072 854 3.380 3.996 4717 55607 690 1058 1238 1 208 1.45717542 107 2527 3.02636174316 5.1426.116 861312061423 G Stin C Print Done and o CN in A diati ble. nflow Present Value of Ordinary Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Period 1 0.990 0.980 0.9710.96209520.943 0935 0.926 0917090908930877 0.870 086208470833 Period 2 1.970 1942 1913 1886 1859 1833 1808 1.783 1759 1736 1.6901.647 1626 1605 1.566 1528 Period 3 2941 2884 2829 2775 2723 2673 2624 2.577 2531 2.487 2402 2322 2283 2246 2174 2.106 Period 4 3.902 3808 3.717 3.630 3546 3.465 3.3873.3123 2403.170303729142.855 2798 2690 2.589 Period 5 4853 4713 4.580 4.452 4329 4.212 4.100 3.993 3.890 3.791 3.605 3.43333523274 3.127 2.991 Period 6 5795 5.601 5417 5242 5.076 49174767 4.623 4.486 4355 4111 3.8893.784 3685 3.498 3.326 Period 7 6.728 6.472 6230 6.002 5786 5,582 5389 5.206 5033 486845644.2884160 4,039 3.812 3605 Period 8 76527325 7020 6.733 6.463 6210 5971 5747 5535 5335 4.968 46394 487 4344 4.078 3837 Period 9 8.566 8. 1627.786 7.435 7108 6.802 6515 6.247 5995 5.759 532849464772 4 607 4303 4031 Period 109471 8.9838530 8.111 7.722 7360 7024 6.710 6418 6145 5.650 5 216 5019 4833 4494 4192 Period 11 10 368 9.787 9253 8.760 83067.8877499713968056495 5.938 5453 5234 5029 4656 4327 Period 12 11 255 10.575 9.964 9.38 8.860 943 7.1616.814 5.660 5421 5 19747934439 Period 13 12.134 11348 10635 99869.3948.853 8.358 7.904 7.4877 1036.4245,842 5583 5342 4910 4533 Period 14 13.004 12.106 11 296 10.563 9.8999295 8745824477867 357 6.6286.002 5724 5468 5008 4.611 Period 15 13.86512849 11.938 11.118 10.38097129 108 855980617.606 6.811 6.142 5.847 5.575 5092 4.675 Period 16 1471813.578 12.561 11652 1083810.106 94478 851 8313 7.8246.9746265 59545669 5162 4730 Period 17 15.562 14292 13.166 12 165 11 274 10477 9763 9 12285448.0227 120 6373 6047 5749 5222 4775 Period 18 16 398 14992 13.754 12659 11.690 10.82810059937287568201725064676.128 5818 5273 4812 Period 19 17226 15678 14 324 13134120851115810.336960489508365736665606198 5.87753164844 Olitabil any shou vest in the Print Done the input O : DISC 5 6 & 7 8 9 0 11 E 2 of 3 (3 complete) ) * Reference Future Value of Ordinary Annuity of $1 | Penot %% 345% | 6% 7.8% 99 10% 14 158 100 1000 1000 | 100 1000 | 100 11000 1000 1000 1000 1000 1000 1006 2010 12 020 | 2030 | 2040 12050 | 2060 12070 ) 2080 2990 2100 12120 2140 2150 3030 3.060 | 391 32 3153 3.184 | 3215 |32463278 | 3310 33743 40 3473 40604 12 12.144245| 4310 4375 |4 40 4 506143 44 479 42193 15.161 |5 200 5.39 5.4165526153715751156715985 16.105625316610 16.742 6152 630815468 6.633 680216975 71537336|79771686185361875 7214 | 7.434 7.66217898 18 14218 24 18654 189231900 | 94870 09 63|107 8.266 18 583188929214 1959 997 10 260 10 64 13 11 44 230323 1373 9269 3755| 10.16| 10 58 13| 49 |1 | 249| 13.02 | 13 56 |4 78 16.19679 Period 10 | 10 46 | 106| 2011 12 58 | 18 132 14 49 | 15 15947 55 | 19340 Period | | 11 57 12 17 128|| 13.49 | 4 21 | 14.97 | 15.78 | 166 7 8 18 53 | 20 65 | 23.04 2435 mm 8% 5 &B %%%% 20.87 | 24 25 12 || 20154 | 3375 | 37 36 | 45 4625116 | 65 44 | 7| 82 Print Done 0
