Splash Planet is considering purchasing a water park in Atlanta, Georgia, for $1,950,000. The new facility will generate annual net cash inflows of $487,000 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 10% on investments of this nature. (Click the icon to view the Present Value of $1 table.) (Click the icon to view Future Value of $1 table.) Read the requirements (Click the loon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of $1 table.) 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 1,950,000 487,000 Payback 40 years Next, determine the formula and calculate the accounting rate of retum (ARR). (Round the percentage to the nearest tenth percent, XX%) Average annual operating income Average amount invested ARR 243,250 Requirements 1. Compute the payback, the ARR, the NPV, the IRR, and the profitability index of this investment. Recommend whether the company should invest in this project. 2. O X Splash Planet is considering purchasing a water park in Atlanta, Georgia, for $1,950,000. The new facility will generate annual net cash inflows of $487,000 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 10% on investments of this nature. (Click (Click the icon to view the Present Value of $1 table.) the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of $1 table.) Read the requirements. 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, X.X.) Amount invested = Payback 4.0 years $ $ Next, determine the formula and calculate the accounting rate of return (ARR). (Round the percentage to the nearest tenth percent, X.X%.) 1,950,000 Expected annual net cash inflow 487,000 Average annual operating income 243,250 Average amount invested = ARR %