Toy Time Products is considering producing toy action figures and sandbox toys. The products require different specialized machines, each costing $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.) - X Data Table Average annual operating income from asset 140000 Accounting rate of return 14 % Initial investment 1,000,000 $ = Year Year 1. Annual Net Cash Inflows Toy action figure Sandbox toy project project $ 317,750 $ 530,000 317,750 360,000 317.750 320,000 317,750 260,000 317,750 50,000 Year 2. Year 3. Year 4. Year 5. $ 1,588,750 $ 1,520,000 Total 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%. Print Done