Toy Time Products is considering producing toy action figures and sandbox toys. The products require different specialized machines, each costing $1.1 million. Each machine has a five-year life and zero residual value. The two products have different patterns of predicted net cash inflows. (Click the icon to view the data.) Calculate the sandbox toy project's ARR. If the sandbox toy project had a residual value of $125,000, would the ARR change? Explain and recalculate if necessary. Does this investment pass Toy Time's ARR screening rule? First, enter the formula, then compute the ARR of the sandbox toy project. (Enter amounts in dollars, not millions. Enter your answer as a percent rounded to two decimal places.) Data Table Accounting = rate of return Annual Net Cash Inflows % Year Sandbox toy If the sandbox toy project had a residual value of $125,000, would the ARR change? Explain and recalculate if necessary. Toy action figure project If the sandbox toy project had a $125,000 residual value, the ARR change. project 525,000 1 $ 332,000 $ 2 390,000 The residual value would cause the yearly 7 to which will cause the average annual operating income from the investment to 3 332,000 332,000 332,000 332,000 (Enter your answer as a percent rounded to two decimal places.) 4 330,000 250,000 50,000 The ARR of the sandbox toy project with a residual value of $125,000 would be %. 5 $ 1,660,000 $ 1,545,000 Total Does this investment pass Toy Time's ARR screening rule? The ARR, exceeds Toy Time's minimum required ARR. Therefore, the sandbox toy project passes the company's screening rule Toy Time will consider making capital investments only if the payback period of the project is less than 3.5 years and the ARR exceeds 8%. Choose from any list or enter any number in the input fields and then continue to the next question. Print Done