River Wild is considering purchasing a water park in Orlando, Florida, for $2,050,000. The new facility will generate annual net cash inflows of $505,000 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. Its owners want payback in less than five years and an ARR of 10% or more. Management uses a 12% hurdle rate on investments of this nature. (Click the icon to view the present value annuity table.) (Click the icon to view the present value table.) (Click the icon to view the future value annuity table.) (Click the icon to view the future value table.) Read the requirements Requirement 1. Compute the payback period, the ARR, the NPV, and the approximate IRR of this investment. (If you use the tables to compute the IRR, answer with the closest interest rate shown in the tables.) (Round the payback period to one decimal place.) The payback period is 4.1 years. (Round the percentage to the nearest tenth percent.) The ARR (accounting rate of return) is 24.27 % (Round your answer to the nearest whole dollar.) Net present value $ The IRR (internal rate of return) is between Requirement 2. Recommend whether the company should invest in this project. Recommendation: River Wild is considering purchasing a water park in Orlando. Florida, for $2.050.000. The new facility will generate annual net cash inflows of $505,000 for eight years. Engineers estimate that the facility will remain useful for eight years and have no residual value. The company uses straight-line depre - X (Click the id Reference Reference (Click the ic Read the requiren Present Value of $1 Present Value of Annuity of $1 Periods 1 Periods 1 Requirement 1. hpu 2 4% 0.962 0.925 0.889 0.855 0.822 5% 0.952 0.907 0.864 0.823 0.784 6% 0.943 0.890 0.840 0.792 0.747 8% 0.926 0.857 0.794 0.735 0.681 14% 0.877 0.769 0.675 0.592 0.519 16% 0.862 0.743 0.641 0.552 0.476 18% 0.847 0.718 0.609 0.516 0.437 2 12% 0.893 1.690 2.402 3.037 3.605 14% 0.877 1.647 2.322 2.914 3.433 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2.174 2.690 3.127 w The payback peri 2.941 2.829 2.487 4 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 4 5 5 (Round the perce 6 5.795 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 4.917 4.355 7 The ARR (accoun 8 0.790 0.760 0.731 0.703 0.676 0.746 0.711 0.677 0.645 0.614 1% 2% 3% 0.990 0.980 0.971 0.980 0.961 0.943 0.971 0.942 0.915 0.961 0.924 0.888 0.951 0.906 0.863 0.942 0.888 0.837 0.933 0.871 0.813 0.923 0.853 0.789 0.914 0.837 0.766 0.905 0.820 0.744 0.896 0.804 0.722 0.887 0.788 0.701 0.879 0.773 0.681 0.870 0.758 0.661 0.861 0.743 0.642 0.820 0.673 0.554 0.780 0.610 0.742 0.552 0.412 0.672 0.453 0.307 0.705 0.665 0.627 0.592 0.558 0.630 0.583 0.540 0.500 0.463 0.410 0.354 0.305 0.263 0.227 7 8 9 0.370 0.314 0.266 0.225 0.191 10% 12% 0.909 0.893 0.826 0.797 0.751 0.712 0.683 0.636 0.621 0.567 0.564 0.507 0.513 0.452 0.467 0.404 0.424 0.361 0.386 0.322 0.350 0.287 0.319 0.257 0.290 0.229 0.263 0.205 0.239 0.183 0.149 0.104 0.059 0.057 0.033 0.022 0.011 3.498 3.812 4.078 4.111 4.564 4.968 5.328 5.650 02 3.889 4.288 4.639 4.946 5.216 (Round your answ 3.685 4.039 4.344 4.607 4.833 0.456 0.400 0.351 0.308 0.270 0.237 0.208 0.182 0.160 0.140 10 1% 2% 3% 4% 5% 6% 8% 10% 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 2.884 2.775 2.723 2.673 2.577 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 5.601 5.417 5.242 5.076 4.623 6.728 6.472 6.230 6.002 5.786 5.582 5.206 4.868 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 8.566 8.162 7.786 7.435 7.108 6.802 6.247 5.759 9.471 8.983 8.530 8.111 7.722 7.360 6.710 6.145 10.368 9.787 9.253 8.760 8.306 7.887 7.139 6.495 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 13.865 12.849 11.938 11.118 10.380 9.712 8.559 7.606 18.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 25.808 22.396 19.600 17.292 15.372 13.765 11.258 9.427 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 4.303 10 4.494 Net present value 11 12 13 14 15 0.585 0.557 0.530 0.505 0.481 0.650 0.625 0.601 0.577 0.555 0.456 0.527 0.497 0.469 0.442 0.417 0.429 0.397 0.368 0.195 0.168 0.145 0.125 0.108 0.162 0.137 0.116 0.099 0.084 0.135 0.112 0.093 0.078 0.065 The IRR (internal 11 12 13 14 15 5.938 6.194 6.424 6.628 6.811 5.453 5.660 5.842 6.002 6.142 5.029 5.197 5.342 5.468 5.575 4.656 4.793 4.910 5.008 5.092 4.327 4.439 4.533 4.611 4.675 0.340 0.315 Requirement 2. 0.377 0.312 0.478 0.375 0.295 0.233 0.092 Recommendation 20 25 30 40 0.215 0.146 0.099 0.046 0.073 0.038 0.020 0.005 0.051 0.024 0.012 0.003 0.037 0.016 0.007 0.001 0.026 0.010 0.004 0.001 0.308 0.208 0.231 0.142 0.174 0.097 20 25 30 40 7.469 7.843 8.055 8.244 6.623 6.873 7.003 7.105 5.929 6.097 6.177 6.233 5.353 5.467 5.517 5.548 4.870 4.948 4.979 4.997 River Wild is considering purchasing a water park in Orlando, Florida, for $2,050,000. The new facility will generate annual net cash Reference - X ence Future Value of Annuity of $1 Future Value of $1 4% 1.000 8% 1.000 fiods 1 12 3 2.040 1% 1.010 1.020 1.030 1.041 1.051 2.080 2% 1.020 1.040 1.061 1.082 1.104 3% 1.030 1.061 1.093 1.126 1.159 5% 1.050 1.103 1.158 1.216 1.276 6% 1.060 1.124 1.191 1.262 1.338 8% 1.080 1.166 1.260 1.360 1.469 10% 1.100 1.210 1.331 1.464 1.611 12% 1.120 1.254 1.405 1.574 1.762 14% 1.140 1.300 1.482 1.689 1.925 4% 1.040 1.082 1.125 1.170 1.217 1.265 1.316 1.369 1.423 1.480 16% 1.160 1.346 1.561 1.811 2.100 2% 1.000 2.020 3.060 4.122 18% 1.180 1.392 1.643 1.939 2.288 1% 1.000 2.010 3.030 4.060 5.101 20% 1.200 1.440 1.728 2.074 2.488 5% 1.000 2.050 3.153 4.310 5.526 3% 1.000 2.030 3.091 4.184 5.309 6.468 7.662 8.892 10.159 11.464 10% 1.000 2.100 3.310 4.641 6.105 5.204 12% 1.000 2.120 3.374 4.779 6.353 6% 1.000 2.060 3.184 4.375 5.637 6.975 8.394 9.897 11.491 13.181 7.442 3.122 4.246 5.416 6.633 7.898 9.214 10.583 12.006 1.340 1.407 1.062 1.072 1.083 1.094 1.105 3.246 4.506 5.867 7.336 8.923 10.637 12.488 14.487 1.126 1.149 1.172 1.195 1.219 1.194 1.230 1.267 1.305 1.344 1.419 1.504 1.594 1.689 1.791 1.587 1.714 1.851 1.999 2.159 1.772 1.949 2.144 2.358 2.594 1.974 2.211 2.476 2.773 3.106 6.152 7.214 8.286 9.369 10.462 2.436 2.826 3.278 3.803 4.411 1.477 6.308 7.434 8.583 9.755 10.950 2.700 3.185 3.759 4.435 5.234 2.986 3.583 4.300 5.160 6.192 6.802 8.142 9.549 11.027 12.578 7.716 9.487 11.436 13.579 15.937 8.115 10.089 12.300 14.776 17.549 14% 16% 18% 20% 1.000 1.000 1.000 1.000 2.140 2.160 2.180 2.200 3.440 3.506 3.572 3.640 4.921 5.066 5.215 5.368 6.610 6.877 7.154 8.536 8.977 9.442 9.930 10.730 11.414 12.142 12.916 13.233 14.240 15.327 16.499 16.085 17.519 19.086 20.799 19.337 21.321 23.521 25.959 23.045 25.733 28.755 32.150 27.271 30.850 34.931 39.581 32.089 36.786 42.219 48.497 37.581 43.672 50.818 59.196 43.842 51.660 60.965 72.035 91.025 115.380 146.628 186.688 181.871 249.214 342.603 471.981 356.787 530.312 790.948 1,181.882 1,342.025 2,360.757 4,163.213 7,343.858 1.551 1.629 1.243 1.268 1.294 1.319 1.346 1.384 1.426 1.469 1.513 1.558 1.710 1.796 1.886 1.980 2.079 1.116 1.127 1.138 1.149 1.161 1.220 1.282 1.348 1.489 1.898 2.012 2.133 2.261 2.397 11.567 12.683 13.809 14.947 16.097 2.853 3.138 3.452 3.797 4.177 2.195 2.502 2.853 3.252 3.707 4.226 4.818 5.492 6.261 7.138 13.743 26.462 50.950 188.884 12.169 13.412 14.680 15.974 17.293 1.539 1.601 1.665 1.732 1.801 2.191 2.666 3.243 4.801 13.486 15.026 16.627 18.292 20.024 6.176 7.288 8.599 10.147 11.974 2.332 2.518 2.720 2.937 3.172 4.661 6.848 10.063 21.725 16.645 18.977 21.495 24.215 27.152 3.479 3.896 4.363 4.887 5.474 9.646 17.000 29.960 93.051 12.808 14.192 15.618 17.086 18.599 26.870 36.459 47.575 75.401 20.655 24.133 28.029 32.393 37.280 5.117 5.936 6.886 7.988 9.266 19.461 40.874 85.850 378.721 14.207 15.917 17.713 19.599 21.579 33.066 47.727 66.439 120.800 7.430 8.916 10.699 12.839 15.407 38.338 95.396 237.376 1,469.772 14.972 16.870 18.882 21.015 23.276 36.786 54.865 79.058 154.762 18.531 21.384 24.523 27.975 31.772 57.275 98.347 164.494 442.593 1.486 1.641 1.806 2,094 2.427 3.262 2.653 3.386 4.322 7.040 3.207 4.292 5.743 10.286 6.727 10.835 17.449 45.259 27.393 62.669 143.371 750.378 22.019 28.243 34.785 48.886 24.297 32.030 40.568 60.402 29.778 41.646 56.085 95.026 45.762 73.106 113.283 259.057 72.052 133.334 241.333 767.091 1.811 2.208