net present value

Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed in follows: 3 Initial Investment (2 limos) Useful life Salvage value Annual net income generated LUt's cont of capital $1,560,000 10 years $ 140,000 $ 149,760 2. 01.06 24 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 14% Calculate 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. Cash Outflows and negative amounts should be indicated by a minus sign. Round your "Present Values" to the nearest whole dollar amount.) Show less Table or Calculator Function: Cash Outflow (Beginning of the Year) $ 1,560,000 n 0 14% 1.560,000 Present Value $ Table or Calculator Function: Cash Inflow (for Next 10 Years) n 10 14% Table Factor Present Value Table or Calculator Function: Cash Inflow (for 10th Year) $ n 140,000 10 14% Table Factor Present Value Total Net Present Value $ (382)