Rolling Wave is considering purchasing a water park in Newark, New Jersey, for $2,050,000. The new facility will generate annual net cash inflows of $515,000 for eight years. Engineers estimate that the facility will remain useful for eight years and have no residual value. The company use straight-line depreciation. Its owners want payback in less than five years and an ARR of 10% or more. Management uses a 14% hurdle rate on investments of this nature.

The present value annuity table:

The future value annuity table:

The present value table:

The future value table:

Requirements:

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.)
2.	Recommend whether the company should invest in this project.

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

years.

(Round the percentage to the nearest tenth percent)

The ARR (accounting rate of return) is:

(Round your answer to the nearest whole dollar)

Net Present Value $:

Requirement 2: Recommend whether the company should invest in this project.

iReference park i mpany annuit Periods 1% 2% 8 % 3% 4% 5% 6% 10% 12% 14% 16% 18% 20% nnuity 0.990 0.980 0.971 0.962 0.952 0943 0.926 0.909 0.893 0877 0.862 0.847 0.833 1.970 1.942 1.913 1886 1859 1833 1783 1.736 1690 1.647 1.605 1.566 1,528 3 2.941 2884 2.829 2775 2.723 3546 2.673 2.577 2.487 2402 2.322 2246 2.174 2.106 4 3.902 3.808 3.717 3630 3.465 3.312 3.170 3.037 2914 2.798 2690 2589 5 4853 4713 4.580 4.452 4,329 4212 3993 3.791 3605 3.433 3.274 3.127 2991 the AR 6 5.795 5.601 5.417 5242 5.076 5.786 4,917 4.623 4.355 4.111 3.889 3685 3.498 3.326 3.605 7 6728 7,652 6.472 6230 6.002 6.733 5.582 5206 4.868 4.564 4.288 4.039 3.812 7.325 7.020 6463 6.210 5747 5.335 4.968 4.639 4.344 4.607 4.078 3.837 9 8.566 8.162 7.786 7.435 7.108 6.802 6.247 5.759 5.328 4.946 4,303 4.031 10 9471 8.983 8.530 8.111 7.722 7.360 6.145 6.710 5.650 5.216 4.833 4.494 4.192 11 10.368 9.787 9.253 8.760 8.306 7.887 7.139 6495 6.814 5.938 5453 5.029 4.656 11.255 10.575 4.327 12 9.954 9.385 9 986 8.863 9.394 8 384 8.853 9 295 7.536 7.904 6.194 6424 6628 6.811 5.660 6 842 6.002 6.142 5,197 5.342 4.793 4.439 4.533 13 12.134 11.348 10.635 13.004 12.106 11.296 10 563 13 865 12 849 11.938 11,118 10 380 7.103 7.367 7606 4910 14 9.899 8244 5.468 5.575 5.008 5.092 15 4.611 9.712 8.559 4.675 18.046 16 351 14.877 13.590 12462 11.470 9.818 22 023 19 523 20 8.514 7.469 6 623 25 5.929 17413 15.622 14 094 19 600 17 292 15 372 5.353 4870 12.783 10.675 9077 13 765 11 258 9427 15.046 11.925 7843 6.873 25 808 6097 6467 30 22 396 4.948 8.066 8.244 32 835 27 355 23.115 19.793 17.159 7.003 40 6.177 6.233 5517 4979 4.997 9.779 7.105 5.548 n click d Print Done X Reference arch sal i he i Periods 2 % 4 % 1% 3% 12 % 5% 6% 14 % 8% 10% 16% 18% 20% he f 1 1.000 1.000 1000 1,000 1000 1,000 1000 1.000 1.000 1.000 1.000 1.000 1000 2 2010 2020 3.060 2030 2040 2050 3.153 2.060 2.080 3246 2100 2.120 2140 2160 2180 3572 2200 3030 3091 3.122 4246 3.184 3310 4641 3374 3440 4921 3.506 3640 4.060 4.122 5204 4.184 4310 5526 4375 4506 5.867 5,066 4779 5215 5368 5.101 5.30 5416 5637 6 105 6.353 6610 6877 7.154 7442 e pa 6.152 6.308 6468 7662 6.633 7890 6802 6975 7.336 7716 8.115 9442 8538 8977 9.930 T 7214 7.434 8.583 9.755 8142 8394 8923 10 637 9.487 10.089 12.300 10.730 11.414 12.142 12916 8206 9.309 10462 8.892 10.159 11.464 9214 10 583 12006 9549 9897 11.436 13 579 15.937 13233 16 085 14 240 15.327 19.086 16.499 20.799 11.027 11.491 12488 14 487 14 776 17.549 17.519 21321 10 10 950 12 578 13.181 19.337 23 521 25.959 11 12 11.567 12.169 12808 14 192 13 486 15.026 16627 18.292 20024 14 207 14972 16 645 18 531 20 655 23.045 27.271 25733 30.850 28755 34 931 42219 12.683 13 809 32 150 39.581 48 497 13412 14 680 15 974 17 293 15.917 17.713 19 599 21.579 16870 18 882 21.015 23 278 18 977 21 495 24 215 27152 21.384 24.133 13 15 618 17 00 18.599 24 523 27975 31.772 28 029 32.393 37 280 32089 37 581 43 842 36 786 14 14 947 43 672 15 16.097 50 818 60 965 59 196 51.660 72 035 20 22.019 24 207 26.870 29 778 41 84 56 O05 95 026 33 066 47 727 36706 45 762 73 106 113 283 259 057 57 275 72062 133 334 241 333 767 091 28 243 91.025 181.871 356 787 115.380 249 214 32030 40588 38450 148 628 342 603 790 948 186 688 54 865 79 050 154 762 98.347 34 785 47.575 471 981 1.181 882 7343 858 66 439 164 494 442 693 4 88 40 530 312 60402 75 401 120 800 1,342 025 2360 757 4183 213 edit fiel Print Done o search - X Reference ng a water park e. The company gineers estimate ses a 14% hurdle sent value annuiti Periods 3 % 0971 4 % 1% 2% 5% 0.962 6 % 0943 8% 10% 12% 14% 16% 18% 20% are value annuity 0990 0.962 0980 0926 0 909 0826 0.862 0 893 0877 0847 0.833 0980 0.961 0943 0925 0.889 0907 0.890 0.857 0769 0.797 0743 0694 0718 0971 0.942 0915 0864 0.840 0794 0.751 0712 0675 0.641 0.609 0579 4 0961 0924 0.888 0.863 0.823 0 784 0855 0.683 0792 0735 0.636 0567 0.592 0.552 0.516 0482 0.951 0906 0.822 0747 0.681 0621 0519 0476 0.437 0.402 ack period, the AR 0942 0888 0 933 6 hterest rate shown i 0837 0790 0746 0.711 0.677 0630 0 564 0507 0705 0456 0410 0.370 0.335 7 O 871 0813 0760 0665 0.583 0540 0.513 0.452 0400 0354 0314 0279 0.923 0914 0853 0731 0.789 0627 rs 0467 0.404 0.305 0.263 0351 0266 0233 0 837 0.766 0744 0703 0645 0614 0 592 0.500 0424 0.361 0.308 0225 0.191 0.194 0.162 0.905 10 0 820 0.676 0.558 0463 0.306 0322 0270 0227 11 0 804 0788 0.722 0650 0 701 0625 0 681 0.661 0585 0.557 0527 0.429 0.397 0350 0319 0290 0.340 0263 0287 0237 0200 0.195 0.162 0 135 12 0.887 0879 0497 0469 0442 0257 0 229 0205 0.168 0.145 0.137 0.112 0.093 13 0773 0.601 0577 0.555 0530 0 505 0.368 0.182 0 160 0.116 0.099 14 0.870 0861 0.758 0.125 0.140 0.108 0078 15 0743 0.642 0.481 0417 0.315 0239 0.183 O 084 0.065 20 0.820 0673 0610 0552 0453 0554 0.458 0.377 0312 0233 0.174 0097 0215 0.149 0104 0.069 0.033 0046 0022 0.011 000 0.073 0.039 0.020 0051 0.037 0.026 0010 0.780 0478 0.375 0295 0231 0208 0142 0145 0.099 0.092 0024 0016 0.007 0001 0742 0412 0.308 0.057 0012 0.003 0.004 0001 0672 0.307 elds and then click O Print Done C X Reference al e 3 % 14 % 15 % 4 % 18% 20% Periods 1% 2% 5% 6% 8% 10% 12% 1060 1080 1.120 1.180 1.392 1020 1.160 he f 1010 1,030 1.040 1.100 1.140 1200 1,050 1.300 1.345 1440 2 1020 1040 1.061 1.082 1.103 1.124 1.166 1210 1254 1.482 1 689 1925 1.030 1.061 1.093 1.405 1561 1.643 1939 1.728 1.125 1.170 1.158 1.191 1.260 1331 1464 4 1,041 1051 1,082 1.104 1.126 1.159 1262 1338 1574 1811 2100 2074 2488 1216 1276 1.360 1469 2.288 5 1217 1611 1762 pay 1062 2436 2700 1.126 1.194 1265 1340 1419 1587 1772 1974 2196 2986 2826 7 1072 1.149 1230 1267 1.305 1.316 1369 2502 3.185 3759 4.435 3583 4.300 1407 1504 1714 1949 2211 1083 1094 1.105 1.172 1.195 1219 3278 3 803 1477 1594 1689 1791 1851 1999 2159 2144 2358 2504 2 478 2773 3.106 2853 1423 1480 5 160 6.192 1551 1.629 3252 3707 10 1.344 4.411 5234 11 1.118 1.127 1243 1268 1384 1710 1890 2012 2133 2251 2397 2332 3479 1.539 2853 3138 3452 3797 4.177 4226 5.117 6938 6380 6.178 7 430 8918 12 1426 1489 1513 1558 1501 1665 2518 3 89 4363 4887 5474 4818 728 1796 1886 1980 2079 13 14 1.138 1294 1319 1348 2720 2937 3.172 5.492 8.599 10.147 10699 12 839 15 407 1149 1732 6261 7988 1801 15 1.161 7.13 9266 11974 20 25 30 1220 1486 1806 2191 2653 3207 4292 5743 10 206 4 661 8 848 10063 21.725 6727 10836 13.743 19 461 40 874 9648 17 000 29 960 93 051 27 393 82 669 38338 96 39 237 376 1489 772 1282 1641 2094 2 566 3.386 25 482 1348 1489 1811 2208 2427 3 243 4 322 17 449 50 950 85 850 143.371 750 378 40 3252 4 B01 7.040 45 259 s00 004 378 721 edt te Print Done