F G P26-30A Using payback, ARR, NPV, IRR, and profitability index to make capital investment decisions Splash Nation is considering purchasing a water park in Atlanta, Georgia, for $1,910,000. The new facility will generate annual net cash inflows of $483,000 for eight years. Engineers estimate that the facility will remain useful for eight years and have no residual value. The company uses straight-line depreciation, and its stockholders demand an annual return of 10% on investments of this nature. Requirements Compute the payback, the ARR, the NPV, the IRR, and the profitability index of this investment Recommend whether the company should invest in this project. Requirement1 Payback Amount invested Expected annual net cash inflow Total net cash inflows during operating life of facility Average annual net cash inflow wat net cash inshow Operating life of facility ope Total depreciation during operating life of facility Cost Residual value E26-16 E26-17 E26-23 E26-27 P26-30A Total depreciation churing operating life of facility Cost Resichual value Total net cash inflows during operating life of facility Less: Total depreciation churing operating life of facility Total operating income during operating life Divide by: Facility's operating life in years Average annual operating income from facility Amount invested+Residual value Average amount invested E26-16 E26-17 E26-23 E26-27 P26-30A Home Insert Page Layout Formulas Data D U Rules Formula Bar "age Break Page Custom Gridlines Headings Preview Layout Views Workbook Views Review View Help Q E Q Zoom 100% Zoom to Selection Fort PDF QuickBooks Tell me what you v Split View Side by Hide Synchronous New Arrange Free Wind A Pe n ide Reset Window Window ARR ARR - ANTAR Average and operating income Average invested Annuity Time Net Cash Laflow PV Factor Pusat Value 1-8 years PV of any Initial investment NPV of the facility Anaty PV Factor 6 = 296, 8) Initial investment Amount of cachot Annaty PV Factor 209,- (i = 189, n = 8) E26-16 E26-17 E26-23 E26-27 P26-30A Annuity PV Factor la = 20%, n= fi = 18%,n = 8) 19 Initial Profitability Index Present value of net cash inflows investment