need it exacly how the help me solve it is done

Splash City is considering purchasing a waterpark in Atlanta, Georgia. for $1850,000. The new facility wil generate annual no cash inflows of 5472.000 for eight years. Engineers estimate that the facility will remain useful for eight years and have no residual value. The company is straight-line depreciation and its stockholders en annual return of 10% on investments of this nature (Click the icon to view the Present Value of S1 table) (Click the conto vew Present Value of Oidrary Arvuity of Stable) Click the icon to view Future Value of $1 ) (Cacte con lo vew Future Value of Oronary Amity of 51 table Read the rements Requirement 1. Compute the payback, the ARR the NP, the IRR and profitability index of this investment. Fest, determine the formula and calculate payback. Round your answer to te decimal place XX) Amount invested Expected a nech now 1.350.000 472.000 Next, determine the formula and close the accounting role of return (RR) (und te permitage to the terpercort XXS) ARR 5 Incol V5 7.50/10) Present Value of $1 3% 1 0909 5% 0.952 0.907 0.864 0.823 0.784 6% 0.943 0.890 0.840 0.792 0.747 7% 0.935 0.873 0.816 0.763 0.713 0.666 0.623 0.582 0.544 0.508 7 00 Periods 1% 2% 4% 0.990 0.980 0.971 0.962 2 0.980 0.961 0.943 0.925 3 0.971 0.942 0.915 0.889 4 0.961 0.924 0.888 0.855 5 0.951 0.906 0.863 0.822 6 0.942 0.888 0.837 0.790 0.933 0.871 0.813 0.760 0.923 0.853 0.789 0.731 9 0.914 0.837 0.768 0.703 10 0.905 0.820 0.744 0.676 11 0.896 0.804 0.722 0.650 12 0.788 0.701 0.625 13 0.879 0.773 0.681 0.601 14 0.870 0.758 0.661 0.577 15 0.861 0.743 0.642 0.555 16 0.853 0.728 0.623 0.534 17 0.844 0.714 0.605 0.513 18 0.836 0.700 0.587 0.494 19 0.828 0.686 0.570 0.475 20 0.820 0.673 0.554 0.456 21 0.811 0.660 0.538 0.439 22 0.803 0.647 0.522 0.422 23 0.634 0.507 0.406 24 0.788 0.622 0.492 0.390 25 0.780 0.610 0.478 0.375 0.772 0.598 0.464 0.361 27 0.764 0.586 0.450 0.347 28 0.757 0.574 0.437 0.333 29 0.749 0.563 0.424 0.321 an 0742 0412 0.746 0.711 0.677 0.845 0.614 0.585 0.557 0.530 0.505 0.481 0.705 0.665 0.627 0.592 0.558 0.527 0.497 0.469 0.442 0.417 0.394 0371 0.350 0.331 0.312 0.294 0.278 0.262 0.247 0.233 0.220 0.207 0.196 0.185 n 174 0.475 0.444 0.415 0.388 0.362 0.339 0.317 0.296 0277 0.258 8% 9% 10% 0.926 0.917 0.857 0.842 0.826 0.794 0.772 0.751 0.735 0.708 0.683 0.681 0.650 0.621 0.630 0.596 0.564 0.583 0.547 0.513 0.540 0.502 0.467 0.500 0.460 0.424 0.463 0.422 0.386 0.429 0.388 0.350 0.397 0.356 0.319 0.368 0.328 0.290 0.340 0.299 0.263 0.315 0.275 0.239 0.292 0.252 0.218 0.270 0.231 0.198 0.250 0.212 0.180 0.232 0.194 0.164 0.215 0.178 0.149 0.199 0.164 0.135 0.184 0.150 0.123 0.170 0.138 0.112 0.158 0.126 0.102 0.146 0.116 0.092 0.135 0.106 0.084 0.125 0.098 0.076 0.116 0.090 0.069 0.107 0.082 0.063 no 0.075 07 12% 14% 15% 16% 18% 20% 0.893 0.877 0.870 0.862 0.847 0.833 0.797 0.769 0.756 0.743 0.718 0.694 0.712 0.675 0.658 0.641 0.609 0.579 0.636 0.592 0.572 0.552 0.516 0.482 0.567 0.519 0.497 0.476 0.437 0.402 0.507 0.456 0.432 0.410 0.370 0.335 0.452 0.400 0.376 0.354 0.314 0.279 0.404 0.351 0.327 0.305 0.266 0.233 0.361 0.308 0.284 0.263 0.225 0.194 0.322 0.270 0.247 0.227 0.191 0.162 0.287 0.237 0.215 0.195 0.162 0.135 0.257 0.208 0.187 0.168 0.137 0.112 0.229 0.182 0.163 0.145 0.116 0.093 0.205 0.160 0.141 0.125 0.099 0.078 0.183 0.140 0.123 0.108 0.084 0.065 0.163 0.123 0.107 0.093 0.071 0.054 0.146 0.108 0.093 0.080 0.060 0.045 0.130 0.095 0.081 0.069 0.051 0.038 0.116 0.083 0.070 0.060 0.043 0.031 0.104 0.073 0.061 0.051 0.037 0.026 0.093 0.064 0.053 0.044 0.031 0.022 0.083 0.056 0.046 0.038 0.026 0.018 0.074 0.049 0.040 0.033 0.022 0.015 0.066 0.043 0.035 0.028 0.019 0.013 0.059 0.038 0.030 0.024 0.016 0.010 0.063 0.033 0.025 0.021 0.014 0.009 0.047 0.029 0.023 0.018 0.011 0.007 0.042 0.026 0.020 0.016 0.010 0.006 0.037 0.022 0.017 0.014 0.008 0.005 nn nan 2015 012 0.458 0436 0416 0.396 0.377 0.359 0.342 0.326 0.310 0.295 0.281 0.268 0.255 0.243 0231 0.795 0242 0.226 0.211 0.197 0.184 0.172 0.161 0.150 0.141 131 Print Done rock MacBook Pro G Search or type URL Reference - hrs. % Future Value of $1 Periods 1% 7% 1 2% 1.020 1.040 1.061 1.082 1.104 2 3 4 5 3% 1.030 1.061 1.093 1.126 1.159 4% 1.040 1.082 1.125 1.170 1.217 5% 1.050 1.103 1.158 1.216 1.276 6% 1.060 1.124 1.191 1.262 1.338 9% 1.090 1.188 1.295 1.412 1.539 1.070 1.145 1.225 1.311 1.403 10% 1.100 1.210 1.331 1.464 1.611 12% 1.120 1.254 1.405 1.574 1.762 14% 1.140 1.300 1.482 1.689 1.925 15% 1.150 1.323 1.521 1.749 2011 ald 6 7 8 9 10 1.265 1.316 1.369 1.423 1.480 1.340 1.407 1.477 1.551 1.629 1.419 1.504 1.594 1.689 1.791 1.501 1.606 1.718 1.8 1.967 1.677 1.828 1.993 2.172 2.367 1.772 1.949 2.144 2.358 2.594 1.974 2.211 2.476 2.773 3.106 2.195 2.502 2.853 3.252 3.707 2.313 2.660 3.059 3.518 4.046 cald 1.010 1.020 1.030 1.041 1.051 1.062 1.072 1.083 1.094 1.105 1.116 1.127 1.138 1.149 1.161 1.173 1.184 1.196 1.208 1.220 1.232 1.245 1.257 1.270 1.282 1.126 1.149 1.172 1.195 1.219 1.243 1.268 1.294 1.319 1.346 11 12 13 14 15 1.194 1.230 1.267 1.305 1.344 1.384 1.426 1.469 1.513 1.558 1.605 1.653 1.702 1.754 1.806 2.580 2.813 3.066 3.342 3.642 2.853 3.138 3.452 3.798 4.177 8% 1.080 1.166 1.260 1.360 1.469 1.587 1.714 1.851 1.999 2.159 2.332 2.518 2.720 2.937 3.172 3.426 3.700 3.996 4.316 4.661 5.034 5.437 5.871 6.341 6.848 3.479 3.896 4.363 4.887 5.474 4.226 4.818 5.492 6.261 7.138 1.539 1.601 1.665 1.732 1.801 1.873 1.948 2.026 2.107 2.191 4.652 5.350 6.153 7.076 8.137 2.105 2.252 2.410 2.579 2.759 2.952 3.159 3.380 3.617 3.870 16 17 18 19 20 1.373 1.400 1.428 1.457 1.486 3.970 4.328 4.717 5.142 5.604 6.130 6.866 7.690 8.613 9.646 8.137 9.276 10.58 12.06 13.74 1.710 1.898 1.796 2.012 1.886 2.133 1.980 2.261 2.079 2.397 2.183 2.540 2.292 2.693 2.407 2.854 2527 3.026 2.653 3.207 2.786 3.400 2.925 3.604 3.072 3.820 3.225 4.049 3.386 4.292 3.556 4.549 3.733 4.822 3.920 5.112 4.116 5.418 4392 5743 9.358 10.76 12.38 14.23 16.37 4.595 5,054 5.560 6.116 6.727 7.400 8.140 8.954 9.850 10.83 21 22 23 24 25 1.516 1.546 1.577 1.608 1.641 1.673 1.707 1.741 1.776 1.860 1.916 1.974 2.033 2.094 4.141 4.430 4.741 5.072 5.427 6.109 6.659 7.258 7.911 8.623 15.67 17.86 20.36 23.21 26.46 2279 2.370 2465 2.563 2.666 2.772 2.883 2.999 3.119 3242 10.80 12.10 13.55 15.18 17.00 19.04 21.32 23.88 26.75 20 OR 18.82 21.64 24.89 28.63 32.92 37.86 43.54 50.07 57.58 RR 21 26 27 28 29 un 1.295 1.308 1.321 1.335 1 MAR 2.157 2.221 2288 2.357 2.427 5.807 6.214 6.649 7.114 7 R12 7.396 7.988 8.627 9.317 10 NA 9.399 10.25 11.17 12.17 1927 11.92 13.11 14.42 15.86 1745 30.17 34.39 39 20 44.69 5005 any Print Done Isaac Maldonado & mework CH26 10 of 11 (7 complete) HW Score: 49. to) Reference Periods 1 2 3 4 5 6 7 9 10 11 12 13 14 15 Present Value of Ordinary Annuity of $1 1% 2% 3% 4% 5% 6% 7% 8% 996 10% 12% 14% 15% 16% 18% 2016 0.990 0.980 0.971 0962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 1.970 1.942 1.913 1886 1859 1.833 1.8081.783 1.759 1.738 1690 1647 1.626 1.605 1.566 1.528 2.9412.884 2.829 2.775 2.723 2 673 2.624 2577 2.531 2487 2.402 2.322 2.283 2246 2.174 2.106 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2855 2.798 2.680 2.589 4.853 4.713 4.580 4452 4.3294212 4.100 3.993 3.890 3.791 3.605 3.433 3.352 3.274 3.127 2.991 5.795 5.601 5.417 5242 5.078 4.917 4.767 4.623 4.486 4355 4.111 3.8893.784 3.685 3.498 3.326 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4288 4.180 4,039 3.812 3.606 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.9684639 4487 4344 4.078 3.837 8.5688.162 7.786 7.4357.108 6.802 6.515 6.2475.995 5.759 5,328 4.946 4.7724.607 4.303 4.031 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 5.019 4.833 4.494 4.192 10.3689.787 9.253 8.760 8.30678877490 7.139 6.305 6.495 5938 5.453 5234 5.029 4.656 4.327 11.255 10.575 9.9549.385 8.863 8.384 7.943 7.536 7.161 6.814 6.194 5.560 5.421 5.197 4793 4439 12,13411.348 10,636 9.986 9.3948.8538.358 7.904 7.487 7.103 6.424 5.842 5.583 5.342 4.910 4.533 13.004 12.10611296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6628 6.002 5.724 5.468 5.008 13.865 12.849 11.93811.11810.3809712 9.108 8.559 8.061 7.6066.811 6.142 5.847 5.575 5.092 4.675 14.718 13.578 12 561 11 652 10.838 10.105 9.447 8.851 8.313 7.824 6.9746.2655.954 5.669 5.162 15.562 14.292 13.166 12.166 11.274 10477 9.763 9.122 8.544 8.022 7.120 6.373 6.047 5.749 5.222 4.775 16.398 14.992 13.75412.659 11.890 10828 10.0599.3728.756 7250 6.467 6.128 5.818 5.273 4.812 17.226 15.6781432413.13412085 11.158 10.336 9.604 8.950 8.365 7.366 6.5506.198 5.877 5.316 4.844 18.046 16.351 14.877 13.590 1246211470 10.5949.818 9.129 8514 7460 6.623 6.250 5.929 4.870 18.857 17.01115415 14.029 12.821 11.764 10.836 10.0179292 8.649 7.562 6687 6.312 5.973 5.354 4.891 19.660 17.658 15987 14.451 13.163 12.042 11.061 10.2019.442 8.772 7.645 6.743 6.359 6.011 5.410 4.909 20.456 18.292 16.44414857 13.489 12.303 11.272 10.371 9.580 8.883 7.718 6.792 6.3996.044 5.432 4.925 21.243 18.914 16.936 15.247 13.799 12.550 11.469 10.529 9.707 8.985 7.784 6835 6.434 6.073 5.451 4.937 22.023 19.5231741315.622 14.094 12.780 11.654 10.675 9.823 9.077 7843 6.873 6.464 6.097 5.467 4.948 22.796 20.121 17.877 15 98314 375 13.000 11.826 10.810 9.929 9.161 7.896 6.906 6.491 6.118 5.480 4.958 23.560 20.707 18.327 16.330 14643 13.211 11.987 10.935 10.027 9.237 7.943 6.935 6.514 6.136 5.492 4.964 24.316 21.281 18.784 16.683 14.898 13.406 12.137 11.061 10.116 9.3077.984 6961 6.534 6.152 5.502 4.970 25.066 21844 19.188 16.984 15.141 13.591 12.278 11.158 10.198 9.370 8.022 6.983 6.551 6.168 5.510 4.975 26 ... 06.10.12.2011 122 123 12 11 5 274 0.497 RE 7. A 177 5517 1070 4611 4.730 16 17 18 19 20 5.350 21 22 22 24 25 26 27 28 29 Print Done wheck MacBook Pro i Reference 7% Periods 1 2 3 4 5 1% 1.000 2.010 3.030 4.060 5.101 2% 1.000 2.020 3.060 4.122 5.204 3% 1.000 2.030 3.091 4.184 5.309 10% 1.000 2.100 3.310 4.641 6.105 12% 1.000 2.120 3.374 4.779 6.353 14% 1.000 2.140 3.440 4.921 6.610 15% 1.000 2.150 3.473 4993 6.742 c 6 7 8 9 10 6.152 7.214 8.286 9.369 10.46 6.308 7.434 8.583 9.755 10.95 6.468 7.662 8.892 10.16 11.46 8.115 10.09 12.30 14.78 17.55 8.536 10.73 13 23 16.09 19.34 8.754 11.07 13.73 16.79 20.30 ald 7.716 9.487 11.44 13.58 15.94 18.53 21.38 24.52 27.98 31.77 11 12 13 14 15 11.57 12.68 13.81 14.95 16.10 12.17 13.41 14.68 15.97 17.29 Future Value of Ordinary Annuity of $1 4% 5% 6% 8% 9% 1.000 1.000 1.000 1.000 1.000 1.000 2.040 2.050 2.060 2.070 2.080 2.090 3.122 3.153 3.184 3.215 3.246 3.278 4.246 4.310 4.375 4.440 4.506 4.573 5.416 5.526 5.637 5.751 5.867 5.985 6.633 6.802 6.975 7.153 7.336 7.523 7.898 8.142 8.394 8.654 8.923 9.200 9.214 9.549 9.897 10.260 10.64 11.03 10.58 11.03 11.49 11.98 12.49 13.02 12.01 12.58 13.18 13.82 14.49 15.19 13.49 1421 14.97 15.78 16.65 17.56 15.03 15.92 16.87 17.89 18.98 20.14 16.63 17.71 18.88 20.14 21.50 22.95 18.29 19.60 21.02 22.55 24.21 26.02 20.02 21.58 23.28 25.13 27.15 29.36 21.82 23.66 25.67 27.89 30.32 33.00 23.70 25 84 28.21 30.84 33.75 36 97 25.65 28.13 30.91 34.00 37.45 41.30 27.67 30.54 33.76 37 38 41.45 46.02 29.78 33.07 36.79 41.00 45.76 51.16 31.97 35.72 39.99 44.87 50.42 56.76 3425 38.51 43.39 49.01 55.46 62.87 36.62 41.43 47.00 53.44 60.89 69.53 39.08 44.50 50.82 58.18 66.76 76.79 41.65 47.73 54.86 63.25 73.11 84.70 44.31 51.11 59.16 68.68 79.95 93.32 47.08 54.67 63.71 74.48 87.35 102.7 49.97 58.40 68.53 80.70 95.34 113.0 52.97 62.32 73.64 87.35 104.0 124.1 EROR RRMA 70 NR QAR 1112 1362 12.81 14.19 15.62 17.09 18.60 20.65 24.13 28.03 32.39 37.28 23.04 27 27 32.09 37.58 43.84 24.35 29.00 34 35 40.50 47.58 55.72 65.08 75.84 88 21 102.4 16 17 18 19 20 20.16 21.76 23.41 25.12 26.87 35.95 40.54 45.60 51.16 57.28 42.75 48.88 55.75 63.44 72.06 50.98 59.12 68.39 78.97 91.02 21 22 23 24 25 17.26 18.43 19.61 20.81 22.02 23.24 24.47 25.72 26.97 28.24 29.53 30.82 32.13 33.45 378 18.64 20.01 21.41 22.84 24.30 25.78 27.30 28.85 30.42 32.03 33.67 35.34 37.05 38.79 an 57 64.00 71.40 79.54 88.50 98.35 104.8 120.4 138.3 158.7 181.9 118.8 137.6 159.3 1842 2128 28.68 30.54 32.45 34.43 36.46 38.55 40.71 42.93 45.22 47 5 81.70 92.50 104.6 118.2 133.3 150.3 1694 190.7 214.6 2013 26 27 28 29 30 1092 121.1 1342 148.6 145 208.3 238.5 272.9 312.1 356 245.7 283.6 327.1 3772 1247 any Print Done Help Me Solve This Question Help Splash City is considering purchasing a water park in Atlanta, Georgia, for $1,850,000. The new facility will generate annual net cash inflows of $472,000 for eight years. Engineers estimate that the facility will remain useful for eight years and have no residual value. The company uses straight-line depreciation, and its stockholders demand an annual return of 10% on investments of this nature. (Click the icon to view the Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of $1 table.) Read the requirements. Requirement 1. Compute the payback, the ARR, the NPV, the IRR, and the profitability index of this investment. Payback is a capital investment analysis method that measures the length of time it takes to recover, in net cash inflows, the cost of the initial investment. All else being equal, the shorter the payback period, the more attractive the asset. When net cash inflows are expected to be equal each year, managers compute the payback by dividing the amount invested by the expected annual net cash inflow. Use the amounts given in the problem to calculate the payback for this investment (Round your answers to one decimal place.) Amount invested Expected annual net cash inflow Payback 1,870,000 487,000 Calculate the ARR (accounting rate of return). Companies are in business to eam profits. The (ARR) is a capital investment analysis method that measures the profitability of an investment by dividing the average annual operating income by the average amount invested. Generally accepted accounting principles (GAAP) are based on accrual accounting, but capital budgeting focuses on cash flows. The desirability of a capital asset depends on its ability to generate net cash inflows-that is, cash inflows in excess of cash outflows-over the asset's useful life. Recall that operating income based on accrual accounting contains noncash expenses, such as depreciation expense and bad debts expense. These expenses decrease operating income but do not require a cash outlay. The capital investment's 3.8 years Help Me Solve This Question Help Splash City is considering purchasing a water park in Atlanta, Georgia, for $1,850,000. The new facility will generate annual net cash inflows of $472,000 for eight years. Engineers estimate that the facility will remain useful for eight years and have no residual value. The company uses straight-line depreciation, and its stockholders demand an annual return of 10% on investments of this nature. (Click the icon to view the Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of $1 table.) Read the requirements. average aruar puramg mico HOT HIUSUTTIL GU a anu dicuntur a HW. Operating life Average annual (Total cash inflows Depreciation during life ) in years operating income ($ 3,896,000 1,870,000 $ 253,250 The denominator of the ARR equation is the average amount invested. The average amount invested in an asset is its book value at the beginning of the asset's useful life plus the book value at the end of the asset's useful life divided by 2. Another way to say that is the asset's initial cost plus the asset's residual value divided by 2. Recall that this project has no residual value. Calculate the average amount invested and complete the calculation of ARR for this investment. (Round the percentage to the nearest tenth percent, X.X%.) Average annual operating income Average amount invested ARR 253,250 935,000 Calculate the NPV (net present value) of the investment 27.1 % Help Me Solve This th Question Help Splash City is considering purchasing a water park in Atlanta, Georgia, for $1,850,000. The new facility will generate annual net cash inflows of $472,000 for eight years. Engineers estimate that the facility will remain useful for eight years and have no residual value. The company uses straight-line depreciation, and its stockholders demand an annual return of 10% on investments of this nature. (Click the icon to view the Present Value of $1 table.) Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of $1 table.) ,00 Read the requirements lad The present value of an annuity of S1 received each year for 8 years, discounted at 12% per year is 4.968 We multiply the net cash inflow, $487,000, by the annuity PV factor to calculate the PV of the annuity. Then, to calculate the net present value of the investment, we must subtract the present value of the cash outflow for the investment (which is already stated in present value terms) from the total PV of cash inflows. Use the following table to calculate the net present value of this investment Net Cash Annuity PV Factor Present Years Inflow (1+12%, n=8) Value 1.8 Present value of annuity $ 487,000 4.968 2,419,416 Investment (1,870,000) Net present value of the investment 549,416 Calculate the internal rate of return (IRR). When NPV is calculated, the PV factor is selected using the company's required rate of return. If the NPV is positive, then you know the actual rate of return is greater than the required rate of return and it is an acceptable project. However, you do not know the actual rate of This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers. $ 0 en 4 Anit. The Help Me Solve This Question Help plash City is considering purchasing a water park in Atlanta, Georgia, for $1,850,000. The new facility will generate annual net cash nflows of $472,000 for eight years, Engineers estimate that the facility will remain useful for eight years and have no residual value. The company uses straight-line depreciation, and its stockholders demand an annual return of 10% on investments of this nature. (Click the icon to view the Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of $1 table.) Read the requirements. 1. The IRR is the interest rate inat makes the cost of the investment equal to the present value or the investments ner cash inrows, so we set up the following equation: Initial investment - PV of net of net cash inflows Initial investment = Amount of cash inflow X Annuity PV factor (i = ?, n = given) 2. Next, we plug in the information we do know-the investment cost, the equal annual net cash inflows, and the number of periods: $1,870,000 = $487.000 x Annuity PV factor (i = ? n = 8) 3. We then rearrange the equation and solve for the Annuity PV factor (i =?, n = 8): Annuity PV factor (/?, n 8) -Initial investment / Amount of cash inflow = $1,870,000 1 $487,000 3.840 (Round to three decimal places, X.XXX.) 4. Finally, we find the interest rate (or interest rate range) that corresponds to this Annuity PV factor. Review the Present Value of Ordinary Annuity of $1 factor table. Scan the row corresponding to the facility's expected life of 8 periods. Choose the po pentage range that the number from Step 33.840falls between The IRR (internal rate of return) is between 18-20% The profitability index computes the number of dollars returned for every dollar invested, with all calculations performed in present value dollars. The profitability index is computed by dividing the present value of net cash inflows by the initial investment. Note that you have already determined the present value of cash inflows when calculating the NPV above. Go ahead and calculate the profitability index for this investment. (Round to two decimal places XXX) Present value of net cash inflows Initial investment Profitability index $ 2,419,416 1,870,000 1.29 Requirement 2. Recommend whether the company should invest in this project. Consider the following: An attractive investment is one in which the payback is less than the operating life of the asset. A positivo NPV means that the project earns more than the required rate of return. A negative NPV means that the project fails to earn the required rate of return A project is attractive if the ARR and IRR are greater than the required rate of return (hurdle rate). . A project with a profitability index greater than one means that it is eaming more than $1.00 per $1.00 invested (in present value dollars) Thin at mamat Mervar artan on the red Armwe to SAA incorrect Answers