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

Initial investment (2 limos)	$	1,080,000
Useful life		10	years
Salvage value	$	120,000
Annual net income generated		95,040
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.

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. Round your "Present Values" to the nearest whole dollar amount.)

Table or Calculator Function:
Cash Outflow (beginning of year)
n=
i=
Present Value
Table or Calculator Function:	Present Value Annuity of $1
Cash Inflow (for next 10 year)
n=
i=
Table Factor
Present Value
Cash Inflow (for 10th year)
n=
i=
Table Factor
Present Value
Total Net Present Value