Splash Planet is considering purchasing a water park in Atlanta, Georgia, for $1,870,000. The new facility will generate annual net cash inflows of $480,000 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.

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.)

Next, determine the formula and calculate the accounting rate of return (ARR). (Round the percentage to the nearest tenth percent, X.X%.)

Calculate the net present value (NPV). (Enter any factor amounts to three decimal places, X.XXX.)

Finally, determine the formula and calculate the profitability index. (Round your answer to two decimal places, X.XX.)

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

i Reference 0.784 0.601 Periods 1% 2% 3% 4% 5% 0.990 0.9800.971 0.962 0.952 0.980 0.961 0.943 0.925 | 0.907 0.971 0.942 0.915 0.889 0.864 0.961 0.924 0.888 0.855 0.823 0.951 0.906 0.863 0.822 0.942 0.888 0.837 0.790 0.746 0.933 0.871 0.813 0.760 0.711 0.923 0.853 0.789 0.731 0.677 0.914 0.837 0.766 0.703 0.645 0.905 0.820 0.744 0.676 0.614 0.896 0.804 0.722 0.650 0.585 0.887 0.788 0.701 0.625 0.557 0.879 0.773 0.681 0.530 0.870 0.758 0.661 0.577 0.505 0.861 0.743 0.642 0.555 0.481 0.853 0.728 0.623 0.534 0.458 0.844 0.714 0.605 0.513 0.436 0.836 0.700 0.587 0.494 0.416 0.828 0.686 0.570 0.475 0.396 0.820 0.673 0.554 0.456 0.377 0.811 0.660 0.538 0.439 0.359 0.803 0.647 0.522 0.422 0.342 0.795 0.634 0.507 0.406 0.326 0.788 0.622 0.492 0.390 0.310 0.780 0.610 0.478 0.375 0.295 0.772 0.598 0.464 0.361 0.281 0.764 0.586 0.450 0.347 0.268 | 0.757 0.574 0.437 0.333 0.255 710 1 562 1011 In 321 L 0 212 Present Value of $1 6% 7% 8% | 9% 10% 12% 14% 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.890 0.873 0.8570.842 0.840 0.816 | 0.794 0.772 0.751 0.712 0.675 0.792 0.763 0.735 0.708 0.683 0.636 0.592 0.747 0.713 0.681 0.650 0.621 0.567 0.519 0.705 0.666 0.630 0.596 0.564 0.507 0.456 0.665 0.623 0.583 0.547 0.513 0.452 0.400 0.627 0.582 0.540 0.502 0.467 0.404 0.351 0.592 0.544 0.500 0.460 0.424 0.361 0.308 0.558 0.508 0.463 0.422 0.386 0.322 0.270 0.527 0.475 0.429 0.388 0.350 0.287 0.237 0.497 0.444 0.397 0.356 0.319 0.257 0.208 0.469 0.415 0.368 0.326 0.290 0.229 0.182 0.442 0.388 0.340 0.299 0.263 0.205 0.160 0.362 0.315 0.275 0.239 0.183 0.140 0.394 0.339 0.292 0.252 0.218 0.123 0.371 0.317 0.270 0.231 0.1980.146 0.108 0.350 0.296 0.250 0.212 0.1800.130 0.095 0.331 0.277 0.232 0.194 0.164 0.116 0.083 0.312 0.258 0.215 0.178 0.149 0.104 0.073 0.294 0.242 0.199 0.164 0.135 0.093 0.064 0.278 0.226 0.184 0.150 0.123 0.083 0.056 0.262 0.211 0.170 0.074 0.049 0.247 0.197 0.158 0.126 0.1020.066 0.043 0.233 0.184 0.146 0.116 0.092 0.059 0.038 0.220 0.172 0.135 0.084 0.053 0.033 0.207 0.161 0.125 0.098 0.076 0.047 0.029 0.196 0.150 0.116 0.090 0.069 0.042 0.026 n 105 10111 LA107 10821002 Lon2710022 0.141 0.417 15% 16% 18% 20% 0.870 0.862 0.847 0.833 0.756 0.743 0.718 0.694 0.658 0.641 0.609 0.579 0.572 0.552 0.516 0.482 0.497 0.476 0.437 0.402 0.432 0.410 0.370 0.335 0.376 0.354 0.314 0.279 0.327 0.305 0.266 0.233 0.284 0.263 0.225 0.194 0.247 0.227 0.191 0.162 0.215 0.195 0.162 0.135 0.187 0.168 0.137 0.112 0.163 0.145 0.116 0.093 0.125 0.099 0.078 0.123 0.108 0.084 0.107 0.093 0.071 0.054 0.093 0.080 0.060 0.045 0.081 0.069 0.051 0.038 0.070 0.043 0.031 0.061 0.051 0.037 0.026 0.053 0.044 0.031 0.022 0.046 0.038 0.026 0.018 0.040 0.033 0.022 0.015 0.035 0.028 0.019 0.013 0.030 0.024 0.0160.010 0.026 0.021 0.014 0.009 0.023 0.018 0.011 0.007 0.020 0.016 0.010 0.006 n017 10011 IngLn005 0.065 0.163 0.060 0.138 0.112 0.106 Reference - X 1.020 1.051 | 1.340 1.477 2.367 3.707 4.652 Future Value of $1 Periods | 1% | 2% | 3% | 4% | 5% | 6% | 7% | 8% | 9% | 10% | 12% 1 14% | 15% 1.010 1.020 | 1.030 | 1.040 | 1.050 | 1.060 | 1.070 | 1.080 | 1.090 | 1.100 | 1.120 | 1.140 | 1.150 1.040 1.061 | 1.082 1.103 11.124 | 1.145 11.166 | 1.188 | 1.210 | 1.254 ] 1.300 | 1.323 1.030 1.061 1.093 1.125 1.158 1.191 1.225 1.260 1.295 | 1.331 | 1.405 1.482 1.521 1.041 1.082 1.126 1.170 1.216 1.262 1.311 1.360 1.412 1.464 | 1.574 1.689 1.749 1.104 1.159 1.217 | 1.276 1.338 1.403 1.469 1.539 1.611 | 1.762 1.925 2.011 1.062 1.126 1.194 1.265 1.419 1.501 1.587 1.677 1.772 1.974 2.195 2.313 1.072 1.149 1.230 1.316 1.407 1.504 1.606 | 1.714 1.828 1.949 2.211 2.502 2.660 1.083 1.172 1.267 1.369 1.594 1.718 1.851 1.993 2.144 2.476 2.853 3.059 1.094 1.195 1.305 1.423 1.551 1.689 1.838 1.999 2.172 2.358 2.773 3.252 3.518 1.105 1.219 1.344 1.480 1.629 1.791 1.967 2.159 2.594 3.106 4.046 1.116 1.243 1.384 1.539 1.710 1.898 2.105 2.332 2.580 2.853 3.479 4.226 1.127 1.268 1.426 1.601 1.796 2.012 2.252 2.518 2.813 13.138 3.896 4.818 5.350 1.138 1.294 1.469 1.665 1.886 2.133 2.410 2.720 3.066 3.452 4.363 5.492 6.153 1.149 1.319 11.513 1.732 1.980 2.261 2.579 2.937 3.342 3.798 4.887 6.261 1.161 1.346 1.558 1.801 2.079 2.397 2.759 3.172 3.642 4.177 5.474 7.138 8.137 1.173 1.373 1.605 1.873 2.183 2.540 2.952 3.426 3.970 4.595 16.130 8.137 9.358 1.184 1.400 1.653 1.948 2.292 3.159 3.700 4.328 5.054 6.866 9.276 10.76 1.428 1.702 2.026 2.854 3.380 3.996 4.717 5.560 7.690 10.58 12.38 1.457 1.754 2.107 2.527 3.617 4.316 5.142 6.116 8.613 12.06 14.23 1.220 1.486 1.806 2.191 2.653 3.207 3.870 4.661 5.604 16.727 9.646 13.74 16.37 1.232 1.516 1.860 2.279 2.786 3.400 4.141 5.034 6.109 7400 | 10.80 15.67 18.82 1.245 1.546 1.916 2.370 2.925 3.604 4.430 5.437 6.659 8.140 12.10 17.86 21.64 1.257 1.577 1.974 2.465 3.072 3.820 4.741 5.871 7.258 18.954 13.55 20.36 24.89 1.270 1.608 2.033 2.563 3.225 4.049 5.072 6.341 7.911 9.850 15.18 23.21 28.63 1.641 2.094 2.666 3.386 4.292 5.427 6.848 8.623 | 10.83 17.00 26.46 32.92 1.295 1.673 2.157 2.772 3.556 4.549 5.807 7.396 9.399 | 11.92 19.04 30.17 37.86 1.308 2.221 2.883 3.733 4.822 6.214 17.988 10.25 13.11 121.32 34.39 1.321 | 1.741 2.288 12.999 3.920 5.112 | 16.649 | 8.627 11.17 14.42 123.88 39.20 50.07 1125 |1776 192671310 | 16 | EA8171M 10317 | 17 16 Q6 | 26 76 | AA so . 57 5Q 7.076 123456789pm2846 BNB99a%84% 2.693 1.196 2.407 1.208 3.026 1.282 1.707 43.54 Reference Periods 2.589 4.329 3.605 Ovow 3.605 8.162 7.435 Present Value of Ordinary Annuity of $1 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.690 1.647 1.626 1.605 1.566 1.528 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.402 2.322 2.283 2.246 2.174 2.106 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.855 2.798 2.690 4.853 4.713 4.580 4.452 4.212 4.100 3.993 3.890 3.791 3.433 3.352 3.274 3.127 2.991 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 4.111 3.889 3.784 3.685 3.498 3.326 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 | 4.868 4.564 4.288 4.160 4.039 3.812 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.487 4.344 4.078 3.837 8.566 7.786 7.108 6.802 6.515 6.247 5.995 | 5.759 5.328 4.946 4.772 4.607 4.303 4.031 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 5.019 4.833 4.494 4.192 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.938 5.453 5.234 5.029 4.656 4.327 11.255 10.575 9.954 9.3858.863 8.384 7.943 7.536 | 7.161 6.814 6.194 5.660 5.421 5.197 4.793 4.439 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6.424 5.842 5.583 5.342 4.910 4.533 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.724 5.468 5.008 4.611 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 6.811 6.142 5.847 5.575 4.675 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 6.974 6.265 5.954 5.669 5.162 4.730 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.022 7.120 6.373 6.047 5.749 4.775 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.250 6.467 6.128 5.818 5.273 4.812 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 6.198 5.877 5.316 4.844 18.046 16.351 14.877 13.590 12.462 11.470 10.594 | 9.818 9.129 8.514 7.469 6.623 6.259 5.929 5.353 4.870 18.857 17.011 15.415 14.029 12.821 11.764 10.836 10.017 9.292 8.649 7.562 6.687 6.312 5.973 5.384 4.891 19.660 17.658 15.937 14.451 13.163 12.042 11.061 10.2019.442 8.772 7.645 6.743 6.359 6.011 5.410 4.909 20.456 18.292 16.444 14.857 13.489 12.303 12.303 11.272 10.371 9.580 8.883 7.718 6.792 6.399 6.044 5.432 4.925 21.243 18.914 16.936 15.247 13.799 12.550 11.469 10.529 9.707 8.985 7.784 6.835 6.434 6.073 5.451 4.937 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 7.843 6.873 6.464 6.097 5.467 4.948 22.795 20.121 | 17.877 15.983 14.375 13.003 11.826 10.810 9.929 9.161 7.896 6.906 6.491 6.118 5.480 4.956 23.560 20.707 18.327 16.330 14.643 13.211 11.987 10.935 10.027 9.237 7.943 6.935 6.514 6.136 24.316 21.281 18.764 16.663 14.898 13.406 12.137 11.051 10.116 9.307 7.984 6.9616.534 6.152 5.502 4.970 25.066 21 81 10 109 16 084 15 111 | 12 501 | 12.278 | 11150 110 109 10 270 L8022 16 082 1 6 551 16 166 1 5510 1 1 075 5.092 5.222 4.964 i Reference Future Value of Ordinary Annuity of $1 16.79 23.04 21.38 13.81 16.63 | Periods | 1% | 2% 1 3 % | 4% | 5% | 6% | 7% | 8% | 9% | 10% | 12% | 14% | 15% 1.000 | 1.000 | 1.000 1.000 | 1.000 | 1.000 | 1.000 | 1.000 | | 1.000 1.000 | 1.000 - 11.000 | 1.000 2.010 2.020 2.030 2.040 2.050 2.060 2.070 2.080 2.090 2.100 2.120 2.140 2.150 3.030 3.060 3.091 3.122 3.153 3.184 3.215 3.246 3.278 3.310 3.374 3.440 3.473 4.060 4.122 4.184 4.246 4.310 4.375 4.440 4.506 4.573 4.641 4.779 4.921 4.993 5.101 5.204 5.309 5.416 5.526 5.637 5.751 5.867 5.985 6.105 6.353 6.610 6.742 6.152 6.308 6.468 6.633 6.802 6.975 7.153 7.336 7.523 7.716 8.115 8.536 8.754 7.214 7.434 7.662 7.898 8.142 8.394 18.654 8.923 9.200 9.487 10.09 10.73 11.07 8.286 8.583 8.892 19.214 9.549 9.897 10.260 | 10.64 11.03 11.44 12.30 13.23 13.73 9.369 9.755 10.16 10.58 11.03 11.49 11.98 12.49 13.02 13.58 14.78 16.09 10.46 10.95 11.46 12.01 12.58 13.18 13.82 14.49 15.19 15.94 17.55 19.34 20.30 11.57 12.17 12.81 13.49 14.21 14.97 15.78 16.65 17.56 18.53 20.65 24.35 12.68 13.41 14.19 15.03 15.92 16.87 17.89 18.98 20.14 24.13 27.27 29.00 14.68 15.62 17.71 18.88 20.14 21.50 22.95 24.52 28.03 32.09 34.35 14.95 15.97 17.09 18.29 19.60 21.02 22.55 24.21 26.02 27.98 32.39 37.58 40.50 16.10 17.29 18.60 20.02 21.58 23.28 25.13 27.15 29.36 31.77 37.28 43.84 47.58 17.26 18.64 21.82 23.66 25.67 27.89 30.32 33.00 35.95 42.75 50.98 55.72 18.43 20.01 21.76 23.70 25.84 28.21 30.84 33.75 36.97 40.54 48.88 59.12 65.08 19.61 21.41 23.41 25.65 28.13 30.91 34.00 37.45 41.30 45.60 55.75 68.39 75.84 20.81 22.84 25.12 27.67 30.54 33.76 37.38 41.45 46.02 51.16 63.44 78.97 88.21 22.02 24.30 26.87 29.78 33.07 36.79 41.00 45.76 51.16 57.28 72.05 91.02 102.4 23.24 25.78 28.68 35.72 39.99 44.87 50.42 56.76 81.70 118.8 30.54 34.25 38.51 43.39 49.01 55.46 62.87 71.40 92.50 120.4 137.6 25.72 32.45 36.62 47.00 53.44 60.89 69.53 79.54 104.6 138.3 159.3 30.42 34.43 39.08 44.50 50.82 58.18 66.76 76.79 88.50 118.2 158.7 28.24 41.65 47.73 54.86 63.25 73.11 84.70 98.35 133.3 181.9 212.8 29.53 33.67 38.55 44.31 51.11 59.16 68.68 79.95 93.32 109.2 150.3 208.3 245.7 35.34 40.71 47.08 54.67 63.71 74.48 87.35 121.1 169.4 238.5 283.6 32.13 37.05 42.93 49.97 58.40 | 68.53 | 80.70 195.34 | 113.0 134.2 | 190.7 | 1272.9 327.1 22 ME | QQ 70 l AE 0 lb007 10 0 173 cal g7 26 | Indal All Age 1 | 91Acl 2011 2770 3456789pmQB466MB9%a8%8B%%% 20.16 31.97 64.00 104.8 24.47 27.30 28.85 41.43 26.97 184.2 32.03 36.46 30.82 102.7 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 Expected annual net cash inflow Payback 1,870,000 480,000 = 3.9 years Next, determine the formula and calculate the accounting rate of return (ARR). (Round the percentage to the nearest tenth percent, X.X%.) Average annual operating income Average amount invested ARR = % Calculate the net present value (NPV). (Enter any factor amounts to three decimal places, X.XXX.) Net Cash Present Annuity PV Factor (i=10%, n=8) Years Inflow Value 1-8 Present value of annuity 0 Investment Net present value of the investment The IRR (internal rate of return) is between Finally, determine the formula and calculate dex. (Round your answer to two decimal places, X.XX.) 12-14% Profitability index 14-16% 16-18% Requirement 2. Recommend whether the c vest in this project. 18-20% Finally, determine the formula and calculate the profitability index. (Round your answer to two decimal places, X.XX.) Profitability index Requirement 2. Recommend whether the company should invest in this project. Recommendation: Splash Planet V, the profitability index is invest in the project because the payback period is the operating life, the NPV is one, and the ARR and IRR are the company's required rate of return