Rolling Wave is considering purchasing a water park in Charlotte, North Carolina, for $2,200,000. The new facility will generate annual net cash inflows of $505,000 for ten years. Engineers estimate that the facility will remain useful for ten 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 12% or more. Management uses a 10% 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 There are four popular methods for analyzing potential capital investments: 1. Payback period 2. Accounting rate of return (ARR) 3. Net present value (NPV) 4. Internal rate of return (IRR) The first two methods, payback period and accounting rate of retum, are fairly quick and easy to compute and work well for capital investments that have a relatively short life span. However, these two methods are inadequate if the capital investments have a longer