Play Life Products is considering producing toy action figures and sandbox toys. The products require different specialized machines, each costing $$1\mathrm{.}1$ million. Each machine has a five$-$year life and zero residual value. The two products have different patterns of predicted net cash inflows.

View the predicted annual net cash inflows.

Calculate the toy action figure project's ARR. If the toy action figure project had a residual value of $$200,000,$ would the ARR change? Explain and recalculate if necessary. Does this investment pass Play Life's ARR screening rule?

Predicted Annual Net Cash Inflows

$\backslash$table$[[$Year$,$Annual Net Cash Inflows$],[,\backslash$table$[[$y action figure$],[$project$]],\backslash$table$[[$Sandbox toy$],[$project$]]],[$Year $1..,.$$$,317,750$$$,500,000],[$Year $2.,,317,750,390,000],[$Year $3.,,317,750,310,000],[$Year $4,,317,750,250,000],[$Year $5.,,317,750,20,000],[$Total$...,$$$,1,588,750$~$=,1,470,000$