Chart:

Initial Investment (for two hot air balloons): $340,000

Useful life: 6 years

Salvage value: $52,000

Annual net incone generated: 29,240

BBS's cost of capital: 7%

Queen 6. 300 pes PA11-1 Calculating Accounting Rate of Return, Payback period, Net Present Value Estimating Internal Rate of Return [LO 11-1, 11-2, 11-3, 11-4) 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: talement for the balora 20.000 Uwe 52.000 Anul net income gested Boscow of a 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.) Accounting Rate of Return 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. Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar.) Net Present Value 4. Recalculate the NPV assuming BBS's cost of capital is 10 percent. (Future Value of 1. Present Value of $1. Future Value Annuity of S1. Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar.)