Seved Help Save & 7 Chi PA11-1 (Algo) Calculating Accounting Rate of Return, Payback Period, Net Present Value, Estimating Internal Rate of Return (LO 11-1, 11-2, 11-3, 11-4) 3 points Balloons By Sunset (BBS) is considering the purchase of two new hot air balloons so that it can expand its desert sunset tours. Various Information about the proposed investment follows: Future Value of St Present Value of $1. Euture. Yolue Annuity of 51. Present Value Annuity of $1) (Use appropriate factor(s) from the tables provided) 00:44 29 ellook Pri Ruferences Initial Investment for two hot air balloons theful life Salvage value Annual net income generated DSS cost of capital $ 485.000 year $ 45,000 40,740 Assume straight line depreciation method is used. Required: Help BBS evaluate this project by calculating each of the following: 1. Accounting rate of return. (Round your answer to 2 decimal places.) 2. Payback period. (Round your answer to 2 decimal places.) 3. Net present value (NPV). (Do not round Intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar) 4. Recalculate the NPV assuming BBS's cost of capital is 11 percent. (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar.) Sved 7 GUILLY SLIDE FOLIERE LURES MUE. B oints Initial investment (for two hot air balloons) Useful life Salvage value Annual net income generated BBS's cost of capital $ 485.000 8 years $ 45,000 40,740 85 00:44:04 Assume straight line depreciation method is used. eBook Print References Required: Help BBS evaluate this project by calculating each of the following: 1. Accounting rate of return. (Round your answer to 2 decimal places.) 2. Payback period. (Round your answer to 2 decimal places.) 3. Net present value (NPV). (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar.) 4. Recalculate the NPV assuming BBS's cost of capital is 11 percent. (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar.) 1. Accounting rate of return 2. Payback period 3. Not present value 4. Net prosent value assuming 11% cost of capital 8.40% 11.90 years TABLE 11.1A Future Value of $1 2% Periods 3% 3.75% 4% 4.25% 5% 6% 7% 8% 0 1.0000 10000 10000 10000 10000 10000 10000 10000 10000 10200 10300 10375 10400 10425 10500 10600 1 10700 10800 2 1.0868 1.1025 11236 1.1449 11664 1,0404 1060910764 10816 10612 10927 1116811249 3 11330 1.1576 1.1910 12250 12597 4 10824 11255 11587 11699 11811 12155 12625 13108 13605 5 11041 11593 12021 12167 12313 12763 13382 14026 14693 6 11262 11941 12472 12653 12837 13401 14185 1.5007 15869 7 11487 12299 12939 13159 13382 14071 15036 16058 17138 8 11717 12668 13425 13686 13951 14775 15938 17182 18509 9 11951 13048 13928 14233 1.4544 15513 16895 18385 1.9990 10 12190 13439 14450 14802 1.5162 16289 17906 1.9672 2.1589 20 14859 1.8061 20882 2.1911 2.2989 26533 32071 3,8697 46610 Periods 9% 10% 11% 12% 13% 14% 15% 20% 25% 0 10000 10000 10000 10000 10000 10000 10000 1.0000 10000 1 10900 11000 11300 11400 11500 12000 12500 11100 11200 12321 12544 2 11881 12100 12769 12996 13225 14400 1.5625 3 12950 13310 13676 1404914429 14815 15209 17280 19531 4 1.4116 1.4641 1.5181 15735 16305 16890 17490 20736 24414 5 1.5386 16105 20114 24883 3.0518 16851 17623 18424 19254 18704 19738 20820 21950 6 16771 17716 2 3131 2.9860 38147 7 18280 19487 2.0762 22107 23526 25023 26600 3.5832 47684 00 19926 21436 2.3045 2.4760 26584 2.8526 3.0590 42998 59605 2.1719 23579 25580 27731 3.0040 32519 3 5179 51598 74506 9 10 23674 2.5937 28394 3.1058 3.3946 37072 40456 61917 93152 5.6044 67275 80623 9.6463115231 137435 16 3665 38 3376 867362 20 TABLE 11.2A Present Value of $1 Periods 2% 3% 3.75% 4% 4.25% 5% 7% 8% 1 2 0.9804 0.9709 0.9639 0.9615 0.9592 0.9524 0.9434 09346 0.9259 0.9612 0.9426 0.9290 0.9246 0.9201 0.9070 0.8900 0.8734 0.8573 0.9423 0.9151 0.8954 0.8890 0.8826 0.8638 0.8396 0.8163 07938 3 4 0.9238 0.8885 0.8631 0.8548 0.8466 0.8227 07921 0.7629 07350 5 0.9057 0.8626 08319 0.8219 0.8121 0.7835 0.7473 0.7130 0.6806 6 7 0.8880 0.8375 0.8018 07903 07790 0.7462 0.7050 0,6663 06302 0.8706 0.8131 0.7728 0.7599 0.7473 07107 0.6651 0.6227 0.5835 0.8535 07894 07449 0.7307 0.7168 0.6768 0.6274 0.5820 0.5403 8 9 0.8368 0.7664 0.7180 0.7026 0.6876 06446 0.5919 0.5439 0.5002 10 0 8203 07441 0.6920 0.6756 0.6595 0.6139 05584 0.5083 04632 20 0.6730 0.5537 0.4789 0.4564 0.4350 0.3769 0.3118 02584 0.2145 Periods 9% 10% 11% 12% 13% 14% 15% 20% 25% 1 0.9174 0.9091 0.9009 0.8929 0.8850 0.8772 0.8696 0.8333 0.8000 0.8417 0.8264 0.8116 0.7972 07831 07695 0.7561 0.6944 06400 2 3 0.7722 0.7513 07312 0.7118 0.6931 0.6750 06575 0.5787 0.5120 4 07084 06830 0.6587 0.6355 0.6133 0.5921 0.5718 0 4823 04096 5 0.6499 0.6209 0.5935 0.5674 0.5428 0.5194 0.4972 0.4019 03277 6 0.5963 05645 0.5346 0.5066 0.4803 0.4556 0.4323 0.3349 02621 7 05470 0.5132 0.4817 0.4523 0.4251 0.3996 03759 0.2791 02097 0.5019 0.4665 0.433904039 0.3762 0.3506 0.3269 0.2326 0.1678 9 0.4604 0.4241 0.3909 0.3606 03329 0.3075 02843 0.1938 0.1342 10 0.4224 03855 0.3522 0 3220 0.2946 0.2697 02472 0.1615 01074 20 0.1784 0 1486 0.1240 0.1037 0.0868 00728 0.0611 00261 00115 TABLE 11.3A Future Value of an Annuity of $1 8% 6% Periods 5% 7% 2% 3% 4% 3.75% 4.25% 1 10000 10000 10000 10000 10000 10000 1.0000 1.0000 1.0000 2.0200 2.0300 2 20500 20600 20800 2.0375 20400 20425 2.0700 3 3.2464 3.0604 3.1836 3.2149 3.0909 3.1139 3.1216 31293 31525 4 4.1836 4.1216 4.2307 4.2465 4.2623 4.3101 4.4399 43746 4.5061 5 5 2040 5.3091 5.3893 5.8666 5.4163 5.4434 5.5256 5.6371 57507 6 6.3061 6.5914 6.4684 6.6330 6.6748 71533 6.8019 73359 6.9753 7 74343 76625 7.8386 7.8983 7.9585 8.1420 8.9228 8.3938 8.6540 8 8.5830 8.8923 9.1326 9.2142 9.2967 9.5491 10.6366 9.8975 10.2598 9 9.7546 11.9780 10.4750 10.5828 10.6918 10.1591 110266 124876 11.4913 10 10 9497 11.4639 11.8678 12 0061 12 1462 12.5779 13. 1808 14.4866 13 8164 20 24 2974 26.8704 29.0174 29.7781 30.5625 33,0660 36.7856 40.9955 45.7620 Periods 9% 10% 11% 12% 13% 14% 15% 20% 25% 1 10000 1.0000 10000 1.0000 1.0000 10000 1.0000 10000 10000 2 20900 2.1000 21100 2.1200 21300 2.1400 2.1500 2 2000 2.2500 3 3.2781 3.3100 3.3421 3.3744 3.4069 3.4396 3.4725 3.6400 3.8125 4 4.5731 4.6410 4.7097 4.7793 4.8498 4.9211 4.9934 5.3680 5.7656 5 5.9847 6.1051 6.2278 6.3528 6.4803 6 6101 67424 74416 8 2070 6 7.5233 7.7156 7.9129 8.1152 8.3227 8.5355 87537 9.9299 11.2588 7 9.2004 9.4872 9.7833 10.0890 10.4047 10.7305 11.0668 12.9159 15.0735 8 11.0285 11.4359 11.8594 12 2997 127573 13.2328 137266 16.4991 19.8419 9 13.0210 13.5975 14 1640 14.7757 15.4157 16.0853 16.7856 20.7989 25.8023 10 15.1929 15.9374 167220 175487 18.4197 19 3373 20 3037 25.9587 33.2529 20 511601572750 64.2028 72.0524 80.9468 91.0249 1024436 186.6880 342 9447 "There is one payment och period TABLE 11.4A Present Value of Annuity of $1 2% 3% Periods 3.75% 4% 4.25% 5% 6% 7% 8% 1 0.9804 09709 0.9639 0.9615 0.9592 0.9524 0.9434 09346 0.9259 2 19416 1.9135 18929 18861 1.8794 18594 1.8334 1.8080 17833 3 2.8839 2.8286 27883 27751 27620 27232 26730 26243 25771 4 38077 3.7171 3.6514 3.6299 3.6086 35460 3.4651 3.3872 33121 5 4.7135 4.5797 4.4833 4.4518 4.4207 4.3295 4.2124 4.1002 3.9927 6 5.6014 5.4172 5.2851 5.2421 5.1997 507574.9173 47665 4.6229 7 6.4720 6.2303 605796.0021 5.9470 5.7864 5.5824 53893 5.2064 00 73255 70197 6.8028 6.7327 6.6638 64632 6.2098 5.9713 5.7466 9 8.1622 77861 75208 74353 73513 71078 6.8017 6.5152 62469 10 8.9826 8.5302 8.2128 8.1109 8.0109 77217 73601 70236 6.7101 16 3514 14.8775 138962 13.5903 13 2944 124622 11.4699 10.5940 9,8181 20 Periods 9% 10% 11% 12% 13% 14% 15% 20% 25% 1 09174 0.9091 090090.8929 0.8550 0.8772 0.8696 0.8333 0.8000 2 17591 17355 17125 16901 1.6681 16467 16257 15278 14400 3 25313 24869 2.4437 2.4018 23612 23216 2283221065 19520 4 32397 31699 3.1024 3.0373 2.9745 2.9137 2.8550 2.5887 2.3616 5 3.8897 3790B 3.6959 3.6048 35172 3.4331 33522 2 9906 26893 6 4.485943553 42305 4.1114 3.9975 3.8887 3.7845 33255 2.9514 7 50330 4.8684 47122 4.5638 4.4226 4.2883 4.1604 36046 3 1611 8 5.5348 53349 46389 4.4873 38372 3.3289 51461 4.967647988 5.5370 53282 5.1317 9 5.9952 57590 4.9464 4.7716 4.0310 3.4631 10 6.4177 6.1446 5.8892 5,6502 54262 5 2161 50188 41925 3.5705 20 9.1285 8.5136 7.9633 7.4694 70248 6.6231 6.2593 4.8696 39539 There one payment och penod