Toy Universe 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 $150,000, would the ARR change? Explain and recalculate if necessary. Does this investment pass Toy Universe'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.) Accounting Average annual operating income from asset Initial investment rate of return 98,000 1,000,000 9.80 % If the sandbox toy project had a residual value of $150,000, would the ARR change? Explain and recalculate if necessary. If the sandbox toy project had a $150,000 residual value, the ARR would change. The residual value would cause the yearly depreciation expense to decrease , which will cause the average annual operating income from the investment to increase (Enter your answer as a percent rounded to two decimal places.) The ARR of the sandbox toy project with a residual value of $150,000 would be a % - X Data Table $ Annual Net Cash Inflows Toy action figure Sandbox toy Year project project Year 1 $ 327,000 $ 500,000 Year 2 327,000 390,000 Year 3 327,000 300,000 Year 4 327,000 280,000 Year 5 327,000 20,000 $ 1,635,000 $ 1,490,000 Total Toy Universe will consider making capital investments only if the payback period of the project is less than 3.5 years and the ARR exceeds 8%