Valuc: 3.00 Polnts PA11-1 Calculating Accounting Rate Of Return, Payback Period, Net Present Value, Estimating Internal Rate Of Return [LO 11-1, 11-2,1 Balloons By Sunset (BBS) Is Considering The Purchase Of Two New Hot Air Balloons So That It Can Expand Its Desert Sunset Tours. Various Information About The Proposed Investment Follows: Initial Investment

Here is the red text that is cut off: (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar.)

6. value: 3.00 points PA11-1 Calculating Accounting Rate of Return, Payback Period, Net Present Value, Estimating Internal Rate of Return [LO 11-1, 11-2, Balloons By Sunset (BBS) is considering the purchase of two new hot air balloons so that it can expand its desert sunset tours. Various information about the proposed investment follows: Initial investment (for two hot air balloons) $ 416,000 Useful life Salvage value Annual net income generated BBS's cost of capital 7 years $ 59,000 38,688 10% Assume straight line depreciation method is used. Required: Help BBS evaluate this project by calculating each of the following: 1. Accounting rate of return. (Round your answer to 1 decimal place.) Accounting Rate of Return % 2. Payback period. (Round your answer to 2 decimal places.) Payback Period Years 3. Net present value (NPV). (Future Value of $1. Present Value of $1, Future Value Annuity of $1. Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do n whole dollar.) Net Present Value 4. Recalculate the NPV assuming BBS's cost of capital is 13 percent. (Future Value of $1. Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1.) (Use appropriate fa Round the final answer to nearest whole dollar.) Net Present Value