Lindas Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows:

Initial investment (2 limos)	$	1,320,000
Useful life		10	years
Salvage value	$	130,000
Annual net income generated	$	121,440
LLTs cost of capital		15	%

Assume straight line depreciation method is used.

Required:

Help LLT evaluate this project by calculating each of the following:

1. Accounting rate of return. (Round your answer to 1 decimal place.)

2. Payback period. (Round your answer to 2 decimal places.)

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.)

4. Without making any calculations, determine whether the IRR is more or less than 15%.