Question : Water Planet is considering purchasing a water park in Atlanta, Georgia, for $1,850,000. The new facility will generate annual net cash inflows of

Question : Water Planet is considering purchasing a water park in Atlanta, Georgia, for $1,850,000. The new facility will generate annual net cash inflows of $475,000 for eight years, Engineers estimate that the facility will remain useful for eight years and have no residual value. The company uses straight-line depreciation and its stockholders demand an annual return of 12% on investments of this nature Prant BE 04 WE NE w Cena TELES DE NED WHEO 10000.00 2.000.000 5000 2020 2021 202 203 650 250 al CO Fone Pro 900 0.700.000 Furiod 05050 Piedi 0940 5 Pried to Purled to Pored OSI Periods S000.00.500049 pered 4 078 HOST 050 000 reeds 50027223 wid 090 02554030230 Pod Pwed 0309 od 0 DST 5.30 Period 2004 45332 2023 Pied: 20 1.00 WOWO BENESSERE G5255 0 0 CE DOSSO ere EDE 304200000 0003950303 2010 0.004540200120.000.000 Pried 700900450000 21045 wiod 2009.0430030100 DO od 00090420.02 0.000 100.000 Period 25.07.2010 000 Date 400.000 Pero Punod HRER w NE 100 RE 35 BE 2210252722222222222222 25000 350238338 27202 CONDO CHECHE tot Prod Pod Pods Pwodt Pod 579558019411342 201220132 100006 8.5841270 IP pod OP DSC08 son pod REISE CONE LITTLE 5: ITS COD051 DECIDE 12 TUDOR po unt SE SAS Po Purid 17133 Pod 0915 DET DES BATERIE 54 Pod 20.000 LU089SARRIBAR ARADA Pwed2 20 000.00 DOW WS. TEP The 1000 TS TER mas DAS 250 tot 20T MELLT 5 35 GEW 000 EDWAR DO OBS DETE 55544200 Future 1818 W M 99 15 169 100 1.000 1041 Food Period 1 Po Period od 4 Period Puidt Period Pwed Foto Pod 10 24 143 1423 34 161 14238210 22 2.522.400 LO 20 04 23 Hoe 116124 lp 1940 Farid 14 Period 15 Pred 10 Pwed Part 13 199245 XE GASS ES ASSESSE BE CE WAT Cart RE VIDE CHE CNC 12.17 Det TE 062 013 |rs| PO 996 tott HOST CIT. 1950 1990-075 DWUSTEE OTR St. Mit 9310 CECIL DSC001 ICE ZMEN. 2009 2005 106 E000 XE SUDAH HOME SCC Utis st 2010. SODA YO NOWYCH -PRESS BEAUX 300 CP Period 21 Foto 22 Parod2 it po Pid25 Pod PO pored OC POUR Fun Woo Ordinary Perca 19 7 300 600 TOT 1500 Pied 2000 2001 2002 2001 2000 2001 2000 2001 2002 202140 2.190 wid Period 400444444490044444040 Pods Pod Pod 2460403334010320010000 2009 014902010201146 NT W WB ME SP 0001 200000 Contact Sittet CAS251-1955 KTOOBCE EPO ECO e po O 06 19tatott olpo Starts SEM 044-5 MODE.NO 05:20 ZBOR: 100 10.HOH ECOSOCO PO4 MET DUI. PO 10. DER SOLO The B 2010 DO tot 1996 16.11.10 IDEOLOL COCOTEC 5000 wall PR tra 42 10.000 30.000 od 1 od 12 Pied Pied 4 od 15 od 16 Period 223344 2.603440502041243034212000 140329024002221227533304.30 od 21 wid 22 Period 23 Pods wed Pend 2012 CSA403212-24 Priod 29 3430 wide od 50 84145 21 2002 2003 2004 2002 1. Compute the payback, the ARR the NPV the IRR and the profitability Index of this investment 2. Recommend whether the company should invest in this project. Requirement 1. Compute the payback, the ARR, the NPV, the IRR, and the profitability index of this investment First, determine the formula and calculate payback. (Round your answer to one decimal place, XX) Amount invested Expected annual net cash Inflow Payback years Next, determine the formula and calculate the accounting rate of return (ARR). (Round the percentage to the nearest tonth percent. X.X%) Average annual operating Income Average amount invested ARR Calculate the net present value (NPV). (Enter any factor amounts to three decimal places, XXXX) Net Cash Inflow Annuity PV Factor (1-12%, n=8) Present Value Years 1-8 Present value of annuity Investment 0 Net present value of the investment The IRR (Internal rate of return) is between options 12-14% 14-16% 1 # Average ainouilt invested 2 Average annual I operating incong * Initial Investment Present Value of net cash options 16-18% 18-20% 100 Finally, delermine the formula and calculate the profitability index (Round your answer to two decimal places, X.XX.) Profitability Index Requirement 2. Recommend whether the company should invest in this project Should of should not greater than or uss than Recommendation Water Planet Invest in the project because the payback period the operating ie the NPV 5 profitability Index one and the ARR and Rare the company's need rate of return Greater than Greater than or OV or less than positive less than negatively