PA11-1 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 air balloons so that it can expand its desert sunset tours. Various information about the proposed investment follows: Initial investment (for two hot air balloons) Useful life Salvage value Annual net income generated BBS's cost of capital 318,000 7 years $ 45,000 26,076 9% Assume straight line depreciation method is used. Required: Help BBS evaluate this project by calculating each of the following: 1. Accounting rate of return. (Round your answer to 1 decimal place.) $ 8.21% I Accounting of Return 2. Payback period. (Round your answer to 2 decimal places.) Payback Period 4.89 Years