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Toy World Products is considering producing toy action figures and sandbox toys. The products require different specialized machines, each costing $1 million. Each machine has
Toy World 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 toy action figure project's ARR. If the toy action figure project had a residual value of $150,000, would the ARR change? Explain and recalculate if necessary. Does this investment pass Toy World's ARR screening nul First, enter the formula, then compute the ARR of the toy action figure project. (Enter amounts in dollars, not millions. Enter your answer as a percent rounded to two decimal places) Accounting rate of retum If the toy action figure project had a residual value of $150,000, would the ARR change? If the toy action figure project had a $150,000 residual value, the ARR The residual value would cause the yearly change which will cause the average annual operating income from the investment to Compute the ARR of the toy action figure project with a residual value of $150.000 (Enter your answer as a percent rounded to two decimal places) The ARR of the toy action Spure project with a residual value of $150,000 Does this investment pass Toy World's ARR screening rule? The ARR exceeds Toy World's minimum required ARR. Therefore, the bay action figure project passes the company's screening ne X Data table Annibal Net Cash inflows Year Toy action figure Sandbox toy project project Year 1 400.16 525.000 Year 2 400.175 350,000 Year 3... 400,175 325.000 Year 4. 400,175 275,000 Year 5 400.175 40,000 2000375 $ 1.515.000 Total Tay World will consider making capital investments only if the payback period of the project is less than 35 years and the ARR exceeds%
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