Splash World is considering purchasing a water park in Atlanta, Georgia, for $1,880,000. The new facility will generate annual net cash inflows of $480,000 for eight years. Engineers estimate that the new facilities 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 12% on investments of this nature.

Calculate the net present value (NPV).

Splash World is considering purchasing a water park in Atlanta. Georgia. for S1.880.000. The new facility will generate annual net cash inflows of S480.000 for eight years. En estimate that the new facilities 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 12% on investments of this nature. E(click he icon to view the Present value of $1 table. (Click the icon to view the Present Value of Annuity of able Requirements 1. Compute the payback, the ARR the NPV, the IRR, and the profitability index of this investmen 2. Recommend whether the company should invest in this project. 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 Payback 480.000 1.880.000 3.9 years Next, determine the formula and calculate the accounting rate of return (ARR (Round the percentage to the nearest tenth percent, XX%) Average annual operating income Average amount invested 245,000 940,000 Calculate the net present value (NPV). (Enter any factor amounts to three decimal places, XXXX Net Cash Annuity PV Factor Present Years nflow (i-12%, n-8) Value 1-8 Present value of annuity nvestment Net present value of the investment