W P26-30A (similar to) Question Help Splash City is considering purchasing a water park in Atlanta, Georgia, for $1,850,000. The new facility will generate annual net cash inflows of $472,000 for eight years. Engineers estimate that the facility will remain useful for eight years and have no residual value. The company uses straight-line depreciation, and its stockholders demand an annual return of 12% on investments of this nature. (Click the icon to view the Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of 1 table.) Click the icon to view Future Value of Ordinary Annuity of $1 table.) Read the requirements $ $ Requirement 1. Compute the payback, the ARR the NPV, the IRR, and the profitability index of this investment First, determine the formula and calculate payback. (Round your answer to one decimal place, XX.) Amount invested Expected annual net cash inflow Payback 1,850.000 472,000 3.9 years Next, determine the formula and calculate the accounting rate of return (ARR). (Round the percentage to the nearest tenth percent, X.X%) Average annual operating income Average amount invested ARR 240,750 925,000 26.0% Calculate the net present Value (NPV). (Enter any factor amounts to three decimal places, X.XXX.) Net Cash Annuity PV Factor Present (i=12%, n=8) Value 1-8 Present value of annuity $ 472,000 4.968 $ 2,344,726 0 Investment (1,850,000 Not present value of the investment $ 494.726 The IRR (internal rate of return) is between 18-20% Finally, determine the formula and calculate the profitability Index. (Round your answer to two decimal places, XXX) = Profitability Index Year's Inflow Average amount invested Average annual operating income Initial investment Present value of net cash inflows P26-30A (similar to) Question Help Splash City is considering purchasing a water park in Atlanta, Georgia, for $1,850,000. The new facility will generate annual net cash inflows of $472,000 for eight years. Engineers estimate that the facility will remain useful for eight years and have no residual value. The company uses straight-line depreciation and its stockholders demand an annual return of 12% on investments of this nature. (Click the icon to view the Present Value of $1 table.) Click the icon to view Present Value of Ordinary Annuity of $1 tablo.) Click the Icon to view Future Value of $1 table.) Click the icon to view Future Value of Ordinary Annuity of 51 table.) Read the requirements $ Requirement 1. Compute the payback, the ARR, the NPV, the IRR, and the profitability Index of this investment First, determine the formula and calculate payback. (Round your answer to one decimal place. XX) Amount invested Expected annual not cash inflow Payback 1,850,000 472,000 3,9 years Next, determine the formula and calculate the accounting rate of return (ARR) (Round the percentage to the nearest tonth porcent, X.X%.) Average annual operating income Average amount invested ARR 240.750 925,000 26.0 % Calculate the net present value (NPV). (Enter any factor amounts to three decimal places, X.XXX.) Net Cash Annuity PV Factor Present Years Inflow (i=12%, n=8) Value Present value of annuity 472.000 $ 2,344,726 (1,850,000) 494.726 Net present value of the investment The IRR (internal rate of return) is between 18-20% Finally, determine the formula and calculate the profitability Index. (Round your answer to two decimal places, X.XX.) Profitability Index 1-8 4.968 0 Investment Average amount invested Average annual operating income Initial investment Present value of net cash inflows Reference Future Value of Ordinary Annuity of S1 Periods 29 3% 4% 5% 6% 7% 8% 99% 10% 12% 14% 15% Period 1 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Period 2 2.010 2.020 2030 2040 2050 2.060 2,070 2.080 2.090 2.100 2.1202.140 2.150 Period 3 3.0303.0603.0913.122 3.153 3.1843.2153 2463.278 3.310 3.3743.4403.473 Period 4 4.0604.122 4.1844.2464.310 4,375 4.440 4.5064.573 4.6414,779 4.9214993 Periods 5.101 5.2045.3095.416 5.526 5.6375.7515.8675.985 6.1056,353 6,610 6.742 Period 6 6.1526.308 6.4686.633 6.8026.9757.1537.3367.523 7.7168.115 8.536 8.754 Period 7 7.21417.434 7.66278988.14283948,654 8.9239.2009,487 10.09 10.73 11.07 Period 8.286 X 583 8.8929.21495499,897 10.260 10.641103 11.44 12.30 13.23 13.73 Period 9 9.369 9.755 10.16 10.58 11.03 | 11.49 11.98 12.49 13.02 13.58 14.78 16,0916,79 Period 10 10.46 10.95 11.46 12.01 12.58 13.18 13.82 14.49 15.19 15.04 17.55 19.34 20.30 Period 11 11.5712.17 12.8113.49 14.21 14 97 15.78 16,65 17.56 18.532065 23.0424.35 Period 12 12.6% 13.41 14,19 15.03 15.92 16.87 17.8918.98 20.14 21.3824.13 27.2729.00 Period 13 13,8114,68 15,62 1663 17.71 1888 20.14 21.50 22.95 24.52 28.03 32.0934.35 Period 14 14.95 15.9717,0918.29 19.602102 22.55 24.21 26.02 27.9832.39 37.58 40.50 Period 15 16.10 17.29 18,60 20.02 21.58 23.28 25.13 27.15 29.36 31.77 37.28 43.84 47.58 Period 16 | 17.26 18.64 20.16 21.8223.66 25.67 27.89 30.3233.00 35.95 42.75 50.98 55.72 Period 17 18.43 20.0121.7623.70 25.84 28.21 30.8433.7536,97 40.544888 59.12 65.08 Period 1819,6121.41|23.41 25.65 28,13 30.91 34,00 37.45| 4130 45.60 55.7568.39 75.84 Period 1920.81 22.8425.12 27.67 30,54 33.76 37.38 41.45 46.02 51.16634478.978821 Period 20 22.02 24,30 26,87 29.7833.07 36.79 41.00 45.76 $1.16 $7.2872.05 91.02 102.4 Period 21 23 24 25,7828,68 31.9735.72 39.9944.87 50.42 56.76 64.00 $1.70104.8 1188 Period 22 24.4727.30 30.543425 38.51 43.3949.0155.4662.87 71.40 92.50 120,4 137.6 Period 23 25.72 28.8532.4536.62 41.43 | 47.00 $3.4460.89 69.53 79.54104.6138,31593 Period 24 26.9730,42 34,4339,08 44.50 50.82 58.1266.7676.79 $8.50 118,2 158.7184.2 Period 25 28.24 32,0336.4641.65 47.73 54.86 63.25 73.11 84.70 98.35133.3181.9212.8 Period 26 | 29,53 33.67 38.55 44.3151.1159.1668.6879.95 93.32 109.2 150.3208.1245.7 Period 27 30,82 35.3440.71 47.0% 54,67 63.7174.48 87.35 102.7 1211 | 169.4238.5 283.6 Period 28 32.13 37.05 42.9349.97 58.40 68.53 $0.7095.34 113.0 134.2 190.7 272.9 327.1 Period 29 33.45 38.79 45.2252.97 62.32 73.648735104.0 124.1148.6214.6 312.13772 Period 30 34.78 40.57 47,5856,08 66,44 79.06 94.46 113.31363 164.5241.3356.8434.7 Period 40 48.8960.40 75.40 95.03 120.81548199,6259.13379 442.6767.11.342 1.779 Period 50 64.46 84.58112.8 152.7 2093 290.3 4065573.815.11.164 2.400 4.995 7.218 Print Done Reference Present Value of Ordinary Annuity of S1 Periods 1% 2% 3% 4% 5% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Period 0.990 0.9800971 0.962 0.952 0943 0.9350926 0917 0.909 0.893 0.877 0.870 0.86208470.833 Period 2 1.970 1942 1913 1.886 1.8591.833 1.081.7831.759 1.736 1.6901.647 1.626 1.6051.566 1.528 Period 3 2.9412.8842.8292.775 2.723 2.673 2.624 2.5772.531 2.487 2.402 2.322 2.283 2.246 2.174 2.106 Period 4 3.902 3.80 3.717 3.630 3.546 3.465 3.3873.3123.240 3.1703.037 2.914 2.855 2.798 2.690 2.589 Periods 4.853 4.713 4.580 4.452 4.3294212 4.100 3.993 3.890 3.791 3.605 3.433 3.352 3.274 3.127 2.991 Period 6 5.795 5.601 5.417 5.2425.0764.917 4.767 4.623 44864.355 4.111 3.8893.784 3.6.85 3.498 3.326 Period 7 6.728 6.472 6.230 6.0025.7865.582 5.389 5.206 5.033 4.8684.564 4.288 4.1604.0393.812 3.605 Period 7652 7.325 7.020 6.733 6.4636.210 5.9715.7475.535 5.335 4.96% 4.639 | 4.487 4.344 | 4.07% 3.837 Period 9 8.566 8.1627.786 7.435 7.106.802 6.515 6.247 995 5.759 5.328 4.9464,7724.607 4 303 4.031 Period 10 9.471.983 | 8.530 8.1117.722 7.360 7.0246.710 6418 6.145 5.6505.216 5.019 4.8334494 4.192 Period 11 10.368 9.7879,2538760 8.3067.887 7.499 7.139 6,8056,495 5.9385.4535.2345.0294.656 4.327 Period 12 11.235 10.575 9.954 9.3858.8638.384 7.9437.5367.1616.814 6.1943.660 5.421 5.1974.793 4.439 Period 13 12.134 11.348|10,635 9.986 9,39488538.3587.9047.487 7.103 6.424.8425.583 5.3424.910 4.533 Period 14 13.00412.106|11.296 | 10.5639.89919.295 X 745 x 2447.786 7.367 | 6.62% 6.002 5.7245.46% 5.00% 4.611 Period 15 13.86512.849|11.938 11.11810.3809712 9.1088.5598.0617.606 6.811 6.142 5.8475.575 5.092 4.675 Period 16 14.718 13.578 12.561 11.652 10,838|10.1009.4478.851 8.313 7.8246.9746.2655.9545.6695.1624.730 Period 17 15.562 14.292 13.166 12.166|11.27410.477 9763 9.1225448.022 7.1206.373 6.047 5.749 5.222 | 4.775 Period 1 16.39% 14,992 13.754 12.65911.690 10.829 10.0599372.756.2017.250 6.4676.128 5.818 5.2734.812 Period 19 17.226 15.678|14.32413.134.12.08 11.15810.336 9.604 8950.365 2.366 6.5506.1985.87753164.844 Period 2018.046 16,35114,877 13.590 12.462 11.470 10.5949.189.129 8.5147.4696.623 6.259 5.9295.353 4.870 Period 21 18.8571701115415114.029 12.82101.764 10.836 10.0179292.6497.5626.4876.3125.9735.384 4.891 Period 22 19.660 17.658|15.937 14.451 13.163 12.042 11.061 10.2019.442.772 7.645 6.743 6.3596.0115.410 4.909 Period 23 20.45618.292 16,44414.857 13.48912.303 11.272 10.371 9.580 8837.718 6.7926,3996.0445.432 | 4.925 Period 24 21.24318.914 16.936 15.247|13.79912.550 11.46910.529 9.707 8.9857.7846.835 6.4346.0735.451 4.937 Period 25 22.02319.5231741315.62214,09412.783 11.65410,675 9.8239.077 7.8436.873 6.464 6.097 5467 4.948 Period 2622.795 2012117.87715.983 14.37513.003 11.826 10.810 9.929 9.1617.8966.906 6.491 6.118.480 4956 Period 27 23.560 20.707183271633014,643 13.211|11.987 10.93510027 9.237 7.9436.9356.514 6.1365 492 4.964 Period 224.3162128118.76416.66314.89813.404 12.13711.0110.110 9.3077.9846.961 | 6.534 6.152.502 4.970 Period 29 25.06621.84419,1816,984|15.141/13.591|12.273 11.10.1999,170 N022 6.93 6.551 6.166 5.510 4.975 Period 20 25 30x22 19619.000 17.292 15.37212.705 12.409.11.258110.274 9,4270557.00 6.566 6.1775517 4.979 Perlod 4032.835 27.355|23.115 19.793171515.044 13.332 11.92510.75 9.779.244 7.1056,642 6.233.548 4.997 Period 50 19.190 11.42425.71021.48218.250 15.762 13.01 12 233|10.9629,913.30471336,661 | 62465.5544.999 Print Done Reference Periods Period Period 2 Period 3 Period 4 Periods Period 6 Period 7 Period & Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 Period 16 Period 17 Period 18 Period 19 Period 20 Period 21 Period 22 Period 21 Period 24 Period 25 Period 26 Period 27 Period 2N Period 29 Period 30 Period 40 Future Value of SI 1% 2% 394 4% 5% 6% 7% *% 9% 10% 12% 14% 15% 1.010 1.020 1.030 1.040 1.050 1.060 1.070 1080 1.090 1.100 1.120 1.140 1.150 1.020 1.0401,061 1.0821.1031.124 1.145 1.1661.1881.210 1.254 1.300 1.323 1.030 1.061 1.093 1.125 1.1581.191 1.225 1.260 1.295 1.331 1.405 1.4821.521 1.041 1042 1.126 1.1701.216 1.2621.311 1.360 1.412 1.464 1.5741.689 1.749 1.0511.104 1.1591.217 1.2761.338 1.403 1.469 1.539 1611 1.762 1.925 2.011 1.062 1.126 1.1941.265 1.3401.419 1.501 1.587 1.677 1.772 1.9742.1952.313 1.072 1.149 1.2301.316 1.407 1.504 1606 1.7141.828 1.949 2211 2.502 2.660 1.08311721.267 1.369 1.477159417181.851 1.9932.144 2.476 2.53 3.059 1.094 1.1951.305 1.423 1.551 1.6891.8381.999 2.172 2.3582.7733.252 3.518 1.105 | 1.219 1.344 1.480 1.6291.791 1.967 2.159 2.367 2.594 3.106 3.707 4.046 1.116 1.24313841.539 1.7101898 2.105 2.3322.580 2.853 3.479 4.2264652 1.127 12681.426 1.601 1.796 2012 2.252 2.5182.131.138 3.896 4.818 5.350 1.1381.2941.469 1665 1.886 2.133 2.410 2.720 3.066 3.452 4.363 5.492 6.153 1.149 1.319 1.513 1.732 1.9802 261 2.579 2.937 3.342 3.798 4.8876.2617.076 1.1611.3461.5581.8012.079 2.3972.759 3.172 3.642 4.1775.4747.1388.137 1.173 1.3731.6051.873 2.183 2.540 2.952 3.4263.970 4.595 6130 8.1379,35% 1.1841.400 1653 1.948 2.292 2.6933.159 3.700 4.3285.0546.8669.276 10.76 1.1961.4281.702 2.0262.407 2.54 3.380 3.996 4.717 5.560 7.690 10,5% 12.38 1.208 1.4571.754 2.107 2.527 3.026 3.6174.3165.142 6.116 8613 12.06 14.23 1.220 1.4861.806 2.1912.653 3.2073,870 4.6613,604 6.727 9.646 13.74 16:37 1.232 1.516 1.860 2.279 2.786 3.40041415.0346.1097.400 10.80 15,67 18.82 1.245 1.546 1.916 2.370 2.925 3.604 4.430 5.4376.6598.140 12.10 17,862164 1.2571.5771.9742.4653.0723.204,7415.8717.25 8954 13.55 20,36 24.89 1.270 1.605 2.033 2,563 3.225 4049 5.0726.14179119.850 15.123.2128,63 1.282 1.641 2.094 26663.386 4.292 5.427 6.8488.623 10.83 17.00 26.4632.92 1.295 1.6732.157 2.772 3.556 4.5495,8077.3969.399 11.92 19.043017 17.86 1.30% 1.707 2.2212.8833.733 4.822 6.2147,988 10.25 13.11 21.32 34.3943.54 1.321 1.741 2.28 2.999 3.920 5.112 6.649 8.627 11.17 14.42 23.8% 39,20 $0.07 1.335 1776 2.357 3.119 4.1165.417.1149.317 12.17 15.86 26.75 4469 57.58 1.348 1.11 2.427 3.243 4.3225.743 7.612 10:06 13.27 17.4529.96 50.9866,21 1.489 2.2083.2624,801 7.000 10.29 14.9721.72 1.4145.2693.05 18892679 1.645 2.692 4,384 2.107 11.47 18.42 29:46 46,90 74.36 1174 289,0 700.21.084 Period 50 Print Done X 1 Reference Present Value of $1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 99% 10% 12% 14% 15% 16% 18% 20% Period 1 0.990 0.980 0,971 0.962 0.952 0.9430.935 0.926 0.9170.9090,8930.877 0.870 0.862 0.8470.833 Period 2 0.980 0961 0.943 0.925 0.9070.890 0.873 0.8570.842 0.826 0.797 0.769 0.756 0.7430.7180.694 Period 3 0.971 09420.915 0.8890.864 0.840 0.816 0.7940.772 0.751 0.712 0.675 0.65% 0.6410.6090.579 Period 4 0.961 0.9240.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.636 0.592 0.572 0.552 0.516 0.482 Period 5 0,951 0.9060,863 0.822 0.784 0.747 0.7130,681 0.650 0.621 0.567 0.519 0.497 0.476 0.437 0.402 Period 6 10.942 0.88% 0.837 0.790 0.746 0.705 0.6660.630 0.396 0.564 0.507 0.456 0.432 0.410 0.370 0.335 Period 7 0.933 0.8710.813 0.7600.11 0.665 0.623 0.5830.547 0.513 0,4520.400 0.376 0.354 0.3140.279 Period 8 0.923 0.853 0.789 0.731 0.677 0.627 0.5820.540 0.502 0.467 0.4040.351 0.327 0,305 0.266 0.233 Period 9 0,914 0.837 0.766 0.703. 0.6450.5920.5440.500 0.460 0.424 0,361 0.308 0.284 0.263 0.225 0.194 Period 10 0.905 0.820 0.7440.676 0.614 0.558 0.500.463 0.422 0.386 0.322 0.270 0.247 0.227 0.191 0.162 Period 110,896 0.804 0,722 0.650 0.585 0.527 0.475 0.429 0.3880.350 0.287 0.237 0.215 0.1950.162 0.135 Period 12 0.887 0.78 0.701 0.625 0.557 0.497 0.4440.397 0.356 0.319 0.257 0.20 0.187 0.1680.1370.112 Period 13 0.879 0.7730,681 0.601 0.530 0.4690.415 0.368 0.3260.290 0.229 0.182 0.163 0.145 0.116 0.093 Period 14 0.870 0.7580,661 0.577 0.505 0.442 0.3880,340 0.299 0.263 0.205 0.1600.141 0.125 0.099 0.078 Period 15 0.861 0.7430,642 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.183 0.140 0.123 0.10% 0.084 0.065 Period 16 0.853 0.7280.623 0.534 0.45 0.394 0.339 0.292 0.252 0.218 0.163 0.123 0.107 0.093 0.071 0.054 Period 170.844 0.714 0.60 0.513 0,436 0.371 0.3170.270 0.231 0.1980.146 0.10% 0.093 0.080 0.060 0.045 Period 18 0.836 0.7000.587 0.49404160350 0.296 0.250 0.212 0.1800,1300,095 0.081 0,00 0,051 0.038 Period 190,828 0.686 0.570 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.116 0.08 0.07000600.043 0.031 Period 20 0,820 0.673 0,5540.456 0.377 0.312 0.25% 0.215 0.17 0.149 0.1040.073 0.061 0.051 0.037 0.026 Period 210.8110,660 0,538 0.439 0.359 0.2940.242 0.1990.164 0.13 0.093 0.064 0.053 0,044 0.031 0.022 Period 22 0.003 0.647 0.522 0.422 0.342 0.278 0.226 0.184 0.150 0.123 0,083 0.056 0.046 0.035 0.026 0.018 Period 23 (0.795 0.6340,507 0.406 0.326 0.262 0.211 0.170 0.138 0.112 0.074 0.049 0.040 0,033 0.022 0.015 Period 240.78 0.622 0.492 0.390 0.310 0.247 0.1970,158 0.126 0.102 0,066 0.043 0.035 0.028 0.019 0.013 Period 25 10.780 0.6100.478 0.375 0.299 0.233 0.184 0.146 0.116 0.092 0,059 0.038 0.030 0,024 0.0160.010 Period 26 0.772 0.598 0,464 0.361 0.281 0.220 0.172 0.135 0.106 0.084 0,053 0.033 0.026 0,021 0.014 0.0009 Period 27 0.764 0.586 0.450 0.347 0.268 0.207 0.161 0.125 0.098 0.076 0.047 0.029 0.023 0.0180.0110.007 Period 28 10.757 0.5740.437 0.333 0.255 0.1960.1500.116 0.090 0.069 0.042 0.026 0.0200.0160.0100.006 Period 29 0.7490.563 0.42403210.243 0.185 0.141 0.107 0.082 0.063 0,037 0.022 0.017 0.014 0.008 0.005 Period 30 0,742 0.5520.412 03080.231 0.1740.131 0,099 0.075 0.057 0,033 0.020 0,015 0,012 0.0X170.004 Period 40 0.672 0.453 0.307 0.208 0.142 0.097 0.067 0,046 0.032 0.022 0.001 0.00 0.0040.003 0.001 0.001 Period 50 0,60 0.372 0.228 0.1410,087 0.054 0.034 0.021 0.0130.0090.003 0.001 0.001 0.001 Print Done