Splash World is considering purchasing a water park in Atlanta, Georgia, for $1,870,000. The new facility will generate annual net cash inflows of $472,000 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 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.) = Payback = years Reference 7% 0.935 0.873 0.816 0.763 0.713 Periods 1% 2% 3% 4% 5% 6% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 Period 2 0.980 0.961 0.943 0.925 0.9070.890 Period 3 0.971 0.942 0.915 0.889 0.864 0.840 Period 4 0.961 0.924 0.888 0.855 0.823 0.792 Period 5 0.951 0.906 0.863 0.822 0.784 0.747 Period 6 0.942 0.888 0.837 0.790 0.746 0.705 Period 7 0.933 0.871 0.813 0.760 0.711 0.665 Period 8 0.923 0.853 0.789 0.731 0.677 0.627 Period 9 0.914 0.837 0.766 0.703 0.645 0.592 Period 10 0.905 0.820 0.744 0.676 0.614 0.558 Period 11 0.896 0.804 0.722 0.650 0.585 0.527 Period 12 0.887 0.788 0.701 0.625 0.557 0.497 Period 13 0.879 0.773 0.681 0.601 0.530 0.469 Period 14 0.870 0.758 0.661 0.577 0.505 0.442 Period 15 0.861 0.743 0.642 0.555 0.481 0.417 0.666 0.623 0.582 0.544 0.508 0.475 0.444 0.415 0.388 0.362 8% 9% 10% 12% 14% 15% 16% 18% 20% 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 0.857 0.842 0.826 0.797 0.769 0.756 0.743 0.7180.694 0.794 0.772 0.751 0.712 0.675 0.658 0.641 0.609 0.579 0.735 0.708 0.683 0.636 0.5920.572 0.5520.516 0.482 0.681 0.650 0.621 0.567 0.5190.497 0.476 0.437 0.402 0.630 0.596 0.564 0.507 0.456 0.432 0.410 0.370 0.335 0.583 0.547 0.513 0.452 0.400 0.376 0.354 0.314 0.279 0.540 0.502 0.467 0.404 0.351 0.327 0.305 0.266 0.233 0.500 0.460 0.424 0.361 0.308 0.284 0.263 0.225 0.194 0.463 0.422 0.386 0.322 0.270 0.247 0.227 0.191 0.162 0.429 0.388 0.350 0.287 0.237 0.215 0.195 0.162 0.135 0.397 0.356 0.319 0.257 0.208 0.187 0.168 0.137 0.112 0.368 0.326 0.290 0.229 0.1820.163 0.145 0.116 0.093 0.340 0.299 0.263 0.205 0.160 0.141 0.125 0.099 0.078 0.315 0.275 0.239 0.183 0.140 0.123 0.108 0.084 0.065 0.292 0.252 0.218 0.163 0.123 0.107 0.093 0.071 0.054 0.270 0.231 0.198 0.146 0.108 0.093 0.080 0.060 0.045 0.212 0.1800.130 0.095 0.081 0.069 0.051 0.038 0.232 0.194 0.164 0.116 0.083 0.070 0.060 0.043 0.031 0.215 0.178 0.149 0.104 0.073 0.061 0.051 0.037 0.026 0.199 0.164 0.135 0.093 0.064 0.053 0.044 0.031 0.022 0.184 0.150 l 0.123 0.083 0.056 0.046 0.038 0.026 0.018 Period 16 0.853 0.728 0.623 0.534 0.458 0.394 Period 17 0.844 0.714 0.605 0.513 0.436 0.371 Period 18 0.836 0.700 0.587 0.494 0.416 0.350 Period 19 0.828 0.686 0.570 0.475 0.396 0.331 Period 20 0.820 0.673 0.554 0.456 0.377 0.312 Period 21 0.811 0.660 0.538 0.439 0.359 0.294 Period 22 10.803 | 0.647 0.522 0.422 0.342 0.278 0.339 0.317 0.296 0.277 0.258 0.250 0.242 0.226 Print Done i - X Reference Future Value of $1 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 1.010 1.020 1.030 1.041 1.051 2% 1.020 1.040 1.061 1.082 1.104 3% 1.030 1.061 1.093 1.126 1.159 4% 1.040 1.082 1.125 1.170 1.217 5% 6% 7% 1.050 1.060 1.070 1.103 1.1241.145 1.1581.191 1.225 1.216 1.262 1.311 1.276 1.338 1.403 8% 9% 10% 1.080 1.090 1.100 1.166 1.1881.210 1.260 1.295 1.331 1.360 1.4121.464 1.469 1.539 1.611 12% 14% 15% 1.120 1.140 1.150 1.254 1.300 1.323 1.405 1.482 1.521 1.574 1.689 1.749 1.762 1.925 2.011 Period 6 Period 7 Period 8 Period 9 Period 10 1.062 1.072 1.083 1.094 1.105 1.126 1.149 1.172 1.195 1.219 1.194 1.230 1.267 1.305 1.344 1.265 1.316 1.369 1.423 1.480 1.340 1.419 1.407 1.504 1.477 1.594 1.551 1.689 1.629 1.791 1.501 1.60 1.718 1.838 1.967 1.587 1.677 1.772 1.714 1.8 1.949 1.851 1.993 2.144 1.999 2.172 2.358 2.159 2.367 2.594 1.974 2.195 2.313 2.21 2.50 2.660 2.476 2.853 3.059 2.773 3.252 3.518 3.106 3.707 4.046 Period 11 Period 12 Period 13 Period 14 Period 15 1.116 1.127 1.138 1.149 1.161 1.243 1.268 1.294 1.319 1.346 1.384 1.426 1.469 1.513 1.558 1.539 1.601 1.665 1.732 1.801 1.710 1.898 2.105 2.332 2.580 2.853 1.796 2.012 2.252 2.518 2.813 3.138 1.886 2.133 2.410 2.720 3.066 3.452 1.980 2.261 2.579 2.937 3.342 3.798 2.079 2.3972.759 3.172 3.642 4.177 3.479 4.226 4.652 3.896 4.818 5.350 4.363 5.492 6.153 4.887 6.261 | 7.076 5.474 7.1388.137 Period 16 Period 17 Period 18 Perid 19 Period 20 1.173 1.184 1.196 1.208 1.220 1.373 1.400 1.428 1.45 1.486 1.605 1.873 1.653 1.948 1.702 2.026 1.754 2.107 1.806 2.191 2.183 2.540 2.952 3.426 3.970 4.595 2.292 2.693 3.159 3.700 4.328 5.054 2.407 2.854 3.380 3.996 4.717 5.560 2.527 3.026 3.617 4.316 142 6.116 2.653 3.207 3.870 4.661 5.6046.727 6.130 6.866 7.690 8.613 9.646 8.137 | 9.358 9.276 10.76 10.58 12.38 12.06 13.74 16.37 Dariod 21 1 232 1.516 1 860 2270 2786 3400 1 141 5021 61 na 7100 1080 1567 1882 Present Value of Ordinary Annuity of $1 1% 6% Periods Period 1 Period 2 Period 3 Period 4 Period 5 2% 3% 0.990 0.980 0.971 1.970 1.942 1.913 2.941 2.884 2.829 3.902 3.808 3.717 4.853 4.713 4.580 4% 5% 7% 0.962 0.952 0.943 0.935 1.886 1.859 1.833 1.808 2.775 2.723 2.673 2.624 3.630 3.546 3.465 3.387 4.452 4.329 4.212 4.100 8% 9% 10% 0.926 0.917 | 0.909 1.783 1.759 1.736 2.577 2.531 | 2.487 3.312 3.240 3.170 3.993 3.890 3.791 12% 14% 15% 0.893 0.877 0.870 1.6901.647 1.626 2.402 2.322 2.283 3.037 2.914 2.855 3.605 3.433 3.352 16% 18% 20% 0.862 0.847 0.833 1.605 1.566 1.528 2.246 2.174 2.106 2.798 2.690 2.589 3.274 3.127 2.991 Period 6 Period 7 Period 8 Period 9 Period 10 5.795 5.601 6.728 6.472 7.652 7.325 8.566 8.162 9.471 8.983 5.417 6.230 7.020 7.786 8.530 5.242 5.076 4.917 4.767 4.623 4.4864.355 4.111 3.889 3.784 6.002 5.786 5.582 5.389 5.206 5.033 4.8684.564 4.288 4.160 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.487 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.328 4.946 4.772 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 5.019 3.685 4.039 4.344 4.607 4.833 3.498 3.326 3.812 3.605 4.078 3.837 4.303 4.031 4.494 4.192 Period 11 Period 12 Period 13 Period 14 Period 15 10.368 9.787 9.253 8.760 8.306 7.887 7.499 11.255 10.575 | 9.954 9.385 8.863 8.384 7.943 12.134 11.348 10.635 9.986 9.394 8.853 8.358 13.004 12.106 11.296 10.563 9.899 9.295 8.745 13.865 12.849 11.938 11.118 10.380 9.712 9.108 7.139 7.536 7.904 8.244 8.559 6.805 6.495 7.1616.814 7.487 7.103 7.786 7.367 8.061 7.606 5.938 5.453 5.234 6.194 5.660 5.421 6.424 5.8425.583 6.6286.002 5.724 6.811 6.142 5.847 5.029 4.656 4.327 5.197 4.793 4.439 5.342 4.910 4.533 5.468 5.008 4.611 5.575 5.092 4.675 Period 16 Period 17 Period 18 Period 19 Period 20 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 6.9746.265 5.954 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.022 7.1206.373 6.047 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 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 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 5.669 5.749 5.818 5.877 5.929 5.162 4.730 5.222 4.775 5.273 4.812 5.316 4.844 5.353 4.870 Deriod 21 18 857| 17 011 15 115 14 020 12821 111 7611 10 836 10 n17 1 0 202 8610 7562 6987 6 212 5 073 5 281 1 801 X i Reference Periods Period 1 Period 2 Period 3 Period 4 Period 5 Future Value of Ordinary Annuity of $1 1% 2% 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 1.000 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 Period 6 Period 7 Period 8 Period 9 Period 10 6.152 6.308 6.468 6.633 6.802 7.214 7.434 7.6627.898 8.142 8.286 8.583 8.8929.214 9.549 9.369 9.755 10.16 10.58 11.03 10.46 10.95 11.46 12.01 12.58 6.975 7.153 | 7.336 7.523 7.716 8.394 8.654 8.923 9.200 9.487 9.897 10.260 10.64 11.03 11.44 11.49 11.98 12.49 13.02 13.58 13.18 13.82 14.49 15.1915.94 8.115 10.09 12.30 14.78 17.55 8.536 8.754 10.73 11.07 13.23 13.73 16.09 16.79 19.34 20.30 Period 11 Period 12 Period 13 Period 14 Period 15 11.57 12.17 12.81 | 13.49 14.21 14.97 12.68 | 13.41 | 14.19 15.03 15.92 16.87 13.81 14.68 15.62 16.63 17.71 18.88 14.95 15.97 17.09 18.29 19.60 21.02 16.10 17.29 18.60 20.02 21.58 23.28 15.78 16.65 17.56 18.53 20.65 23.04 24.35 17.89 18.98 20.14 21.38 24.13 27.27 29.00 20.14 21.50 22.95 24.52 28.03 32.09 34.35 22.55 24.21 26.02 27.98 32.39 37.58 40.50 25.13 27.15 29.36 31.77 37.28 43.84 47.58 Period 16 Period 17 Period 18 Period 19 Period 20 17.26 18.64 20.16 21.82 23.66 25.67 18.43 20.01 21.76 23.70 25.84 28.21 19.61 21.41 23.41 25.65 28.13 30.91 20.81 22.84 25.12 27.67 30.54 33.76 22.02 24.30 26.87 29.78 33.07 36.79 27.89 30.32 33.00 35.95 42.75 50.98 55.72 30.84 33.75 36.97 40.54 48.88 59.12 65.08 34.00 37.45 41.30 45.60 55.75 68.39 75.84 37.38 41.45 46.02 51.16 63.44 | 78.97 88.21 41.00 45.76 51.16 57.28 72.05 91.02 102.4 Period 21 23.24 25.78 28.68 31.97 35.72 39.99 44.87 50.42 56.76 64.00 81.70 104.8 118.8 Next, determine the formula and calculate the accounting rate of return (ARR). (Round the percentage to the nearest tenth percent, X.X%.) + ARR % Calculate the net present value (NPV). (Enter any factor amounts to three decimal places, X.XXX.) Net Cash Annuity PV Factor Present Years Inflow (i=10%, n=8) 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 the profitability index. (Round your answer to two decimal places, X.XX.) Profitability index the operating life, the NPV is the profitability index is one, and the ARR and IRR are Recommendation: Water City invest in the project because the payback period is the company's required rate of return