Question
Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment is as follows Initial investment (2 limos)
Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment is as follows
Initial investment (2 limos) $960,000
Useful life 10 years
Salvage value $120,000
Annual net income generated $82,560
LLT's cost of capital 13%
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 percentage answer to 1 decimal place.)
2. Payback period. (Round your answer to 2 decimal places.)
3.Net present value.
I require answer for all the 3 questions. Thank you
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