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PA11-1 (Algo) Calculating Accounting Rate of Return, Payback Period, Net Present Value, Estimating Internal Rate of Return [LO 11-1, 11-2, 11-3, 11-4] Balloons By Sunset
PA11-1 (Algo) Calculating Accounting Rate of Return, Payback Period, Net Present Value, Estimating Internal Rate of Return [LO 11-1, 11-2, 11-3, 11-4] Balloons By Sunset (BBS) is considering the purchase of two new hot alr balloons so that it can expand its desert sunset tours. Varlous Information about the proposed investment follows: : - Present Value of $1, Future Value Annulty of $1, Present Value Annulty of $1.) Note: Use approprlate factor(s) from the tables provided. Assume straight IIne depreclation method is used. Required: Help BBS evaluate this project by calculating each of the following: 1. Accounting rate of return. Note: Round your answer to 2 decimal places. 2. Payback perlod. Note: Round your answer to 2 decimal places. 3. Net present value (NPV). Note: Do not round Intermedlate calculatlons. Negatlve amount should be Indlcated by a minus sign. Round the final answer to nearest whole dollar. 4. Recalculate the NPV assuming BBS's cost of capital is 15 percent. Note: Do not round Intermedlate calculations. Negatlve amount should be indlcated by a minus sign. Round the final answer to nearest whole dollar
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