Playland Products is considering producing toy action figures and sandbox toys. The products require different specialized machines, each costing $1 million. Each machine has a five-year life and zero residual value. The two products have different pattems of predicted net cash inflows (Click the icon to view the data.) Calculate the toy action figure project's ARR. If the toy action figure project had a residual value of S150,000, would the ARR change? Explain and recalculate if necessary. Does this investment pass Playland's ARR screening rule? First, enter the formula, then compute the ARR of the toy action figure project. (Enter amounts in dollars, not millions. Enter your answer as a percent rounded to two decimal places.) Accounting Data Table Average annual operating income from asset Initial investment rate of retun 171,500 S 1,000,000 17.15 If the toy action figure project had a residual value of $150,000, would the ARR change? Annuat Net Cash Infows If the toy action figure project had a S150,000 residual value, the ARR would change. Toy action Year Sandbox toy project figure project The residual value would cause the yearly depreclation expense to decrease which will cause the average annual operating income from the investment to increase 1. 371,500 $ 520,000 Compute the ARR of the toy action figure project with a residual value of $150,000. (Enter your answer as a percent rounded to two decimal places.) 2. 371,500 375,000 The ARR of the toy action figure project with a residual value of S150,000 is . 371,500 3. 300,000 4. 371,500 250,000 371.500 40,000 5. 1,857,500 $ 1,485,000 Total Playland will conaider making capital investments only if the payback period of the project is less than 3.5 years and the ARR exceeds 8% Print Done Enter any number in the edit fields and then click Check Answer 1 part remaining Clear All Check