E11-4 Calculating Accounting Rate of Return, Payback Period, Net Present Value, Estimating Internal Rate of Return [LO 11-1, 11-2,11-3, 11-4] Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows: Initial investment (2 limos) Useful life Salvage value Annual net income generated LLT's cost of capital $ 600,000 8 years $ 100,000 48,000 1296 Assume straight line depreciation method is used. Required: Help LLT evaluate this project by calculating each of the following: 1.Accounting rate of return. Accounting Rate of Retun 2. Payback period. (Round your answer to 2 decimal places.) Payback Period Years 3. Net present value. (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. Cash Outflows and negative amounts should be indicated by a minus sign. Round your "Present Values" to the nearest whole dollar amount.) Table or Calculator Function: Cash Outflow (Beginning of the Year) Present Value Table or Calculator Function: Cash Inflow (for Next 8 Years) Table Factor Present Value Table or Calculator Function: Cash Inflow (for 8th Year) Table Factor Present Value Total Net Present Value 4. Without making any calculations, determine whether the IRR is more or less than 12%. O Less than 12% O Greater than 12%