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

Intital Investment	780,000
Useful Life	10 Years
Salvage Value	100,000
Annual Net Income Generated	64,740
LLT'S 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.

3. Net present value.

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