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

Initial investment (2 limos)	$	780,000
Useful life		10	years
Salvage value	$	100,000
Annual net income generated		64,740
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 percentage 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. Do not round intermediate calculations. Cash Outflows and negative amounts should be indicated by a minus sign. Round your "Present Values" to the nearest whole dollar amount.)

Table or Calculator Function Cash Outflow (Beginning of the Year) S 780,000 151 % Present Value 780,000 Table or Calculator Function resent Value Annuity of $1 Cash Inflow (for Next 10 Years) 132,740 10 151 % 5.0188 666,196 Table Factor Present Value Table or Calculator Function resent Value of $1 Cash Inflow (for 10th Year) 10 151 % Table Factor 0.2472 Present Value Total Net Present Value