Vigor-max is considering buying a new water treatment system for its plant in Austin, Texas. The company screens its potential capital investments using the payback and accounting rate of return methods. If a potential investment has a payback of less than nine years and a minimum 14% accounting rate of return, it will be considered further. The data for the water treatment system follow: Click the icon to view the water treatment system data.) Read the requirements. Requirement 1. Compute the water treatment system's payback. (Round your answer to one decimal place, X.X.) Amount invested Expected annual net cash inflow = = L Payback years Requirement 2. Compute the water treatment system's ARR. (Round the percentage to the nearest tenth percent. XX%.) Average annual operating income Average amount invested = ARR Requirement 3. Should Vigor-max turn down this investment proposal or consider it further? The water treatment system proposal passes both initial screening tests. The payback is less than nine years, and the accounting rate of return is higher than 14%. Vigor-max should further analyze the proposal. Data Table - X Requirements - X $ 77,000 Cost of water treatment system Estimated residual value Estimated annual net cash inflow (each year for 10 years) from anticipated environmental cleanup savings Estimated useful life 1. Compute the water treatment system's payback. 2. Compute the water treatment system's ARR. 3. Should Vigor-max turn down this investment proposal or consider it further? 14.000 10 years Print Done