Playland Products is considering producing toy action figures and sandbox toys. The products require different specialized machines, each costing $1.1 million. Each machine has a five-year life and zero residual value. the two products have different patterns of predicted net cash inflows.

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Calculate the toy action figure projects ARR. If the toy action figure project had a residual value of $175,000, would the ARR change? Explain and recalculate if necessary. Does this investment pass Playland's ARR screening rule?

Vahie. The two preducts have diliferom patlems of predicted het cash intlows Click the icon to vitww the data) APR screpeing tule? Accounting. Average annual operating ithcomo from asset Intal investment tase of retien Data table Playland will consider making capital investments only if the payback period of the project is less than 3.5 years and the ARR exceeds 8%