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Linda's Luxury Travel (LLT is considering the purchase of two Hummer limousines. Various information about the proposed investment follows $1,800,000 Initial investment (2 limos) Useful
Linda's Luxury Travel (LLT is considering the purchase of two Hummer limousines. Various information about the proposed investment follows $1,800,000 Initial investment (2 limos) Useful life 10 years Salvage value 1 40,000 180,000 Annual net income generated 15% LLTs cost of capital 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.) Accounting Rate of Return 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)
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