Ocean World is considering purchasing a water park in Atlanta, Georgia, for $$2,100,000.$ The new facility will generate annual net cash inflows of $$490,000$ for ten years. Engineers estimate that the facility will remain useful for ten years and have no residual value. The company uses straight$-$line depreciation. Its owners want payback in less than five years and an ARR of $10\%$ or more. Management uses a $12\%$ hurdle rate on investments of this nature.

$)($Click the icon to view the present value annuity table.$)($Click the icon to view the present value table.$)$

E $($Click the icon to view the future value annuity table.$)$

$($Click the icon to view the future value table.$)$

Read the requirements.

Requirement $1.$ Compute the payback period, the ARR, the NPV$,$ and the approximate IRR of this investment. $($If you use the tables to compute the IRR, answer with the closest interest rate shown in the tables.$)($Round the payback period to one decirfal place.$)$

The payback period $($in years$)$ is $$

$($Round the percentage to the nearest tenth percent.$)$

The ARR $($accounting rate of return$)$ is $\%$

$($Round your answer to the nearest whole dollar.$)$

Net present value $$

The IRR $($internal rate of return$)$ is between $$

Requirement $2.$ Recommend whether the company should invest in this project.

Recommendation: $$