Water City is considering purchasing a water park in Atlanta, Georgia, for $1,800,000. The new facility will generate annual net cash inflows of $445,000 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 10% 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. ..) Payback years Next, determine the formula and calculate the accounting rate of return(ARR). (Round the percentage to the nearest tenth percent, X.X%.) ARR Calculate the net present value (NPV). (Enter any factor amounts to three decimal places, X.XXX.) Net Cash Annuity PV Factor (i.10%, n#8) Present Years Inflow Value 1-8 Present value of annuity 0 Investment Net present value of the investment The IRR (internal rate of return) is between Finally, determine the formula and calculate the profitability index. (Round your answer to two decimal places. .) Profitability index Requirement 2. Recommend whether the company should invest in this project. Recommendation: Water City profitability index is Y, the the operating life, the NPV is invest in the project because the payback period is one, and the ARR and IRR are Vthe company's required rate of return. Requirements 1. Compute the payback, the ARR, the NPV, the IRR, and the profitability index of this investment. 2. Recommend whether the company should invest in this project Print Done Reference Present Value of $1 Periods 1% 2% 3% 4% | 5% | 6%, 7% 8% 9% 10% 12% 14% | 15% 16% | 18%| 20% 1 0.990 0.980 | 0.971 0.962 | 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.870 0.862 0.847 0.833 2 0.980 0.961 | 0.943 0.925 | 0.907 | 0.890 0.873 0.857 0.842 0.826 0.797 | 0.769 0.756 0.743 0.718 0.694 3 0.971 0.942 0.915 0.889 | 0.864 | 0.840 0.8 16 0.794 | 0.772 | 0.751 0.712 | 0.675 0.658 0.641 | 0.609 0.579 4 0.961 0.924 | 0.888 0.855 | 0.823 | 0.792 0.763 0.735 | 0.708 | 0.683 0.636 | 0.591 0.572 0.552 0.516 0.482 5 0.951 0.906 | 0.863 0.822 | 0.784 | 0.747 0.713 0.681 0.650 | 0.621 0.567 0.519 | 0.497 0.476 0.437 0.402 6 0.94 0.888 | 0.837 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.507 0.456 0.432 0.410 | 0.370 | 0.335 7 0.933 0.871 | 0.813 0.760 | 0.7 11 0.665 0.623 0.583 0.547 | 0.513 0.452 0.40 0.376 0.354 0.314 0.279 8 0.923 0853 0.789 0.731 0.677 0.627 0.5820.5400.5 9 0.914 0.837 | 0.766 0.703 | 0.645 0.592 0.544 0.500 0.460 0.424 0.361 0.308 0.284 0.263 0.225 0.194 10 02 0.467 0.404 0.350.327 0.305 0.266 0.233 905 | 0.820 | 0.744 | 0676 | 0.614 | 0.558 | 0.508 | 0.463 | 0.422 | 0.386 0.322 | 0.270 | 0.247 0.22719| | 0.162 11 0. 50 | 0.585 | 0.527 0.475 0.429 0.388 0.350 0.287 0.237 0.215 0.195 0.162 0.135 12 0.887 0.788 | 0.701 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.257 0.208 0.187 0.168 0.137 0.112 13 0.879 0.773 0.681 0.601 0.530 0.469 0.415 0.368 | 0.326 0.290 0.229 | 0.182 0.163 0.145 0.116 0.093 14 0.870 0.758 0.661 0.577 | 0.505 | 0.442 0.388 0.340 | 0.299 0.263 0.205 0.160 0.141 0.125 0.099 0.078 15 0.861 0.743 0.642 0.555 | 0.481 | 0.417 0.362 0.315 | 0.275 0.239 0.183 0.140 0.123 0.108 0084 0.065 896 0.804 0.722 0.6 16 0.853 0.728 0.623 0.534 0.458 0.394 0.339 0.292 0.2520.2180.163 0.123 0.107 0.093 0.071 0.054 17 0.844 0.714 0.605 0.513 | 0.43 0.371 0.317 0.270 0.23 0.198 0.146 | 0.108 0.093 0.080 0.060 0.045 18 0.836 0.700 | 0.587 0.494 | 0.4 16 0.350 0.296 0.250 0.212 0.180 0.130 | 0095 | O.081 0.069 0.051 0.038 19 0.828 0.686 0.570 0.475 | 0.396 | 0.331 0.277 0.232 0.194 0.164 0.116 0.083 0.070 0.000 0.043 0.031 20 0.820 0.673 | 0.554 0.456 0.377 | 0.3 12 0258 0.215 0.178 0.149 0.104 | 0.073 0.061 0.051 | 0.037 0.026 21 0.811 0.660 | 0.538 0.439 0.35 0.294 0.242 0.199 0.164 0.135 0.093 | 0.064 0.053 0.044 | 0.031 0.022 22 0.803 0.647 0.522 0.422 0.3420.2 8 0.026 0.018 23 0.795 0.634 0.507 0.406 | 0.32 0.262 0.211 0.170 0.138 0.112 0.074 | 0.049 0.040 0.033 0.022 0.015 24 0.788 0.622 0.492 0.390 | 0.310 0.247 0.197 0.158 0.126 0.102 0.066 | 0.043 0.035 0.028 | 0.019 0.013 25 0.780 0.610 | 0.478 0.375 | 0.295 0.233 0.184 0.146 0.116 0.092 0.059 | 0.038 | 0.030 0.024 | 0.016 0.010 278 0.226 0.184 0.150 0.123 0.083 0.056 0.046 0.03 26 0.772 0.598 | 0.464 0.361 | 0.281 | 0.22 0.172 0.135 0.106 | 0.084 0.053 0.033 0.026 0.021 | 0.014 0.009 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 0.018 0.011 0.007 28 0.757 0.574 | 0.437 0.333 0.255 0.196 0.150 0.116 0.090 0.069 0.042 0.026 0.020 0.016 | 0.010 0.006 29 0.749 0.563 0.424 0.321 | 0.243 0.185 0.141 0.107 0.082 0.063 0.037 0.022 0.017 0.014 | 0.008 0.005 30 0.742 0.552 0.412 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.033 | 0.02 0.015 0.012 0.007 0.004 40 0.672 0.453 0.307 0.208 | 0.142 0.097 0.067 0.046 0.032 0.022 0.011 0.005 0.004 0.003 0.001 0.001 50 0.608 0.372 0.228 0.141 | 0.087 | 0.054 0.034 0.021 0.0 13 0.009 0.003 0.00 | | 0.001 0.001 1 Reference Present Value of Ordinary Annuity of S1 Periods 1% 2% | 3% 4% 5% 6 18 209 0.990 0.97-0.962 0.952 | 0.943 0935 | 0.926 | 0.917 | 0.909 | 0.893 | 0.877 | 0.870 0.362 | 0847 | 0833 1970 | 1942 | 1913 | 1.886 | 1.859 | 1.833 | l sos | 1.783 1.759 1.736| 1.6901 1.647 1.626 1605 1566 | 152M 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.4872.402 2.322 2.283 2.246 2.174 2.106 390| 3.808 | 3.7 17 3.630 3.546 3.465 3.387 3.312 3.240 3.170 | 3.037 2.914 2.855 2.798 2.690 2.589 4.853 | 4.713 | 4.580 | 4.452 | 4.329 | 4.212 | 4.100 | 3.993 | 3.890 | 3.791 | 3.605 | 3.433 | 3.352 | 3274 | 3.127 | 2991 4 6 5.795 5.601 | 5.41 5.242 | 5.076 4.917 4.767 4.623 | 4.486 4.355 | 4.111 3.889 3.784 | 3.685 3.498 | 3.326 7 6.728 6.472 6.230 6.002 5786 5.582 5.389 5.206 | 5.033 4.868 | 4.564 4.288 4.160 | 4.039 3.812 3.605 8 7.652 7.325 | 7.020 6.733 6.463 6.210 5.971 5.747 | 5535 5.335 4968 4.639 4.48 4.344 4078 3.837 9 8.566 8.162 | 7.786 7.435 7.108 6.802 6,515 6.247 5.995 5.759 | 5.328 4.946 4.772 | 4607 4.303 4.031 10 9.471 8.983 | 8,530 8.111 7.722 7.36 7.024 6.710 | 6.418 6.145 5.650 5.216 5.019 | 4.833 4.494 4.192 11 10.3681 9787 9253 8.760 | 8.306 7.887 7.499 7.139 | 6.805 6.495 | 5.938 5.453 5.234 | 5.029 4.656 4.327 12 11.255 10.575 9.954 9.385 8.863 8.384 7.9437.5367. 6.814 6.194 5.660 5.421 5.197 4.793 4.439 13 | 12. 1341 1 1.340635| 9986 | 9394 | 8.853 | 8.358 | 7.904 | 7.487 7.103 | 6424 | 5.842 | 5.583 | 5.342 | 4.910 | 4.533 9.295 8,745 8.244 7.7867.367 6.6286,0025.7245.4685,0084.611 13.865| 12.849| 11.938| 11.118 | 10.380| 9.712 | 9.108 8.559 | 8.06-7.606 | 6.811 | 6.142 | 5.847 | 5.575 5.092 | 4.675 14 13.004 12.106 11.296 10.563 9.899 16 14.718 13.578 12.561 11.652 10.838 10,106 9.4478.858.313 7.824 6.974 6.265 5.954 5.669 5.162 4.730 17 15.562 14.292 13.166 12.166 11.274 10.477 9.7639.1228.5448.022 7.120 6.373 6.047 5.749 5.222 4.775 18 16.398| 14.992 | 13.754 12.6591 11.690| 10.828| 10.059 9.372 8.756 8.201 7.250 6.467 6.128 | 5.818 5.273 4.812 19 17.2261 15.678 14.324 13.134 12.085 11.1581 10.336 9,604 | 8.950 8.365 7.366 6550 6.198 | 5.877 5.316 4.844 20 18,046 16.351 14.877 13.590 12.462 11470 10.594 9.818 9,129 8.5147.469 6,6236.2595,9295.3534.870 21 18.857| 17.011 | 15.415 14.0291 12.821 11.764| 10.836 10.0 171 9292 8.649 7.562 6,687 6312 5.973 5.384 4.891 22 19.660 17.658 15.937 14.451 13.163 12.042 1.061 10.2019.442 8.772 7.645 6.743 6.359 6.01 5.410 4.909 23 20.456 18.292 16.444 14.857 13.489 12.303 11.272 10.3719.580 8.883 7.718 6.792 6.399 6.044 5.432 4.925 24 21.243 18.914| 16.936 15.247| 13.799 12.550| 11.469 10.529| 9.707 8.985 7784 6.835 6.434 6073 5.451 4.937 25 22.023 19.5231 17.4 13 15.622 14.094 12.783| 11.654 10.675| 9.823 9.077 7.843 6.873 6.464 6097 5.46 4.948 26 22.795 20.121 17.877 15.983 14.375 13.003 11.826 10,810 9929 9.16 7.896 6.906 6.49 6.118 5,480 4.956 27 23.5601 20.707| 18.327| 16.330| 14.643 13.2 11.987 10.935 | 10.027 9.237 7.943 6.935 6.514 | 6.136 5.492 4.964 28 24.3 16 21.281 | 18.764 16.663| 14.898 13.4061 12.137 11.051 | 10.116 9.307 7.984 6961 6534 6.152 5.50 4.970 29 25.0661 21.844| 19. 188 16.9841 15.141 13.591 12.278 11.1581 10.198 9.370 8.022 6983 6551 6166 5.510 4.975 30 25.808 22.396 19.6 57,0036.5666.1775.5174.979 07 7.984 6.9616.534 6.152 5.502 4.9 600 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.05 40 32.835 27.355 23.115 19,793 17.159 15,046 13.332 11,925 10.757 9.779 8.244 7,105 6,642 6.233 5.548 4.997 50 39.196 31.424 25.730 21.482 18.256 15.762 13.801 12.233 10.962 9.915 8.304 7.133 6.66 6.246 5.554 4.999 Print Done Reference Future Value of Si Periods 1% 2% 5% 6% 7% 8% 9% 10% 12% 14% 15% 1.010 | 1.020 | 1.030 | 1.040 | 1.050 | 1.060 | 1.070 | 1.080 | 1.0901 i.100 1.120 1.140 1.150 2 1.020 1.040 1.06 1.082 1.103 1.124 1145 .166 1.188 1.210 1.254 1.300 1.323 3 | 1.030 | 1.061 1.093 | 1.125 | 1.158 1.191 | 1.225 | 1.260| 1.295 1.331 1.405 1.432 1521 1.464 1.574 1.689 1.749 5 1.05 1 1 . I 04 1 . 1 59 1 .2 1 7 1 .276 1 .338 1 .403 1.469 1.539 1.61 1 1 .762 1 .925 2.011 3% 4% 4 | 1,04 1 1,082 | 1.126| 1.170 | 1.216| 1.262 | 1.311 | 1.360| 1.412 1.0621.1261.1941.2653404191.50 1.587 1.6771.7721974 2.195 2.313 1.072 | 1.149 1.230 | 1.31 1.083 1.172 1.267 1.369 1.477 1.594 1.7181851 1993 2.144 2.476 2.853 3.05 1.407 | 1.504 | 1.606 | 1.714| 1.828 1.949| 2.211 2.502 2.660 9 | 1,094 1 . I 95 | 1.305 | 1.423 | 1.551 1.689 | 1.838 | 199 2172 | 2.358 | 2.773 3.25| 3.518 10 1-105 1.219 1.344 1.480 1.629 1.791 1.967 2.159 2.367 2.594 3.106 3.707 4.046 11 1.11 1.243 1.38 1.539 1.710 1.898 2.105 2.332 2.580 2.853 3.479 4.226 4.652 12 1.127 1.268 1.426 1.601 1.796 2.012 2.25| 2.518 2.813 3.138 3.896 4.818 5.350 13 1.138.29414691.665 1.8862.133 2.410 2.720 3.066 3.452 4.363 5.492 6.15 14 | 1.149 | 1.319 | 1.513 | 1.732 | 1980 | 2.261 | 2.579 | 2.937 | 3.342 | 3.798 | 488 6261 7076 15 1.16 1.346 1.558 1.801 2.079 2.397 2.759 3.172 3.641 4.177 5.474 7.138 8.137 16 1.173 1.373 1.605 1.873 2.183 2.54 2.95| 3.426 3.970 4.595 6.130 8.137 9.358 17 1.184 1.400 1.653 1.948 2.292 2.693 3.159 3.700 4.328 5.054 6.866 9.27 10.76 18 1.196 1.428 1.702 2.026 2.407 2.854 3.380 3.996 4.717 5.560 7.690 10.58 12.38 19 1.208 1.457 1.754 2.107 2.527 3.026 3.61 4.316 5.142 6.116 8.613 12.06 14.23 20 1.220 1.486 1.806 2.191 2.653 3.207 3.870 4.661 5.604 6.727 9.646 13.74 16.37 21 1.232 1.5 16 1.86 2.279 2.786 3.40 4141 5.034 6.109 7.400 10.80 15.67 18.82 22 1.245 1.546 1.916 2.370 2.925 3.604 | 4.430 5.437 6.659 8.140 12.10 17.86 21.64 23 1.257 1.577 1.974 2.465 3.072 3.820 4.741 5.871 7.258 8.954 13.55 20.36 24.89 24 1.270 1.608 2.033 2.56 3.225 4.049 5.07) 6.341 7.911 9.850 15.18 23.21 28.63 25 1.282 1.641 2.094 2.666 3.386 4.29) 5.427 6.848 8.623 10.83 17.00 26.46 32.92 26 | 1.295 | 1.673 2.157 | 2.772 | 3.556 | 4.549 | 5.807 | 7.396 | 9.399 | 11.92 | 19.04 30.17 | 37.86 27 1.308 1.707 2.221 2.883 3.733 4.822 6.2 14 7.988 10.25 13.11 21.32 34.39 43.54 28 1.321 1.741 2.288 2.999 3.920 5. 112 6.649 8.627 11.17 14.42 23.88 39.20 50.07 29 1.335 1.776 2.357 3.119 4. I 16 5.418 7.1 14 9.3 17 12.17 15.86 26.75 44.69 57.58 30 1.348 1.811 2.427 | 3.243 | 4.322 5.743 | 7.612 1006 | 13.27 | 17.45 299 5095 | 6621 40 1.489 2.208 3.262 4.801 7.040 10.29 14.9 2 1.72 3 1.41 5.26 93.05 188.9 267.9 50 1.645 2.692 4.384 7.107 11.47 18.4| 29.46 46.90 74.36 | 117.4 289.0 700.2 1,084 Print Done Reference Future Value of Ordinary Annuity of S1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14%, 15% 1.000 1.000 1.00 1.000| 1.000 | 1.000 1.000 1.000 1.000 1.000| 1.000 1.000 1.000 80 2.090 2.100 2.120 2.140 2.150 3.030 3,060 | 3,091 3.122 | 3.153 | 3.184 | 3.215 | 3.246 | 3.278 | 3.3101 3374 344 3473 4 4.060 4.12| 4.184 4.246 4.31 4.375 444 4.506 | 4.573 4.641 4.779 4.921 4.993 5 5. 101 5.204 5.309 5.416 5.52 5.637 5.751 5.86 5.985 6.105 6.3531 6.610 6.742 6 6. I 52 6.308 6.468 6.633 6.802 6.975 7.153 7.336 7.523 7.716 8.115 8.536 8.754 7 7.2 14 7.434 7.66| 7.898 8.142 8.394 8.654 8.92 9.200 9.487 10.09 10.73 11.07 2 | 2.010 2.020 2.030 | 2.040 | 2.050 | 2.060 | 2070 | 20 8286 8.583 | 8.892 | 9.2 14 9,549 | 9,897 | 10.260| 10,64 | 11.03 | 11.44 12.30 | 13.23 13.7 9.3699.755 10.16 10.5811.0311.4911.98 12.49 13.02 13.58 14.7816.09 16.79 10 10.46 10.95 11.4 12.01 12.58 13. 18 I 3.82 14.49 15.19 15.94 17.55 19.34 20.30 1111.57 12.1712.81 13.49 14.214.97 15.78 6.65 17.56 18.53 20.65 | 23.04 24.35 12.68 13.4 4.19 15,03159216.87 17.89 18,98 20.14 21.38 24.13 27.27 29.00 13.81 14.68 15.62 16.63 | 17.71 | 18.88 | 20.14 21.50 | 22.95 | 24.52 28,03 32.09 343 14 14.95 15.97 17.09 18.29 19.6 21.02 22.55 24.21 26.02 27.98 32.39 37.58 40.50 16.10 17.29 | 18.60 20.02 | 21.58 | 23.28 | 25.13 27.15 | 29.36 31.77 | 3728 | 43.84 47.5 16 17.26 18.64 20.1 21.82 23.6 25.67 27.89 30.3 33.00 35.95 42.75 50.98 55.72 17 18.43 20.01 21.7 2370 25.84 28.21 30.84 33.75 36.97 40.54 48.88 59.12 65.08 19.61 21.41 23.41 25.65 28.13 309 34.00 37.45 41.30 45.60 55.75 68.39 75.84 1920.81 22.8425.12 27.67 30.54 33.76 37.38 4145 46.02 51.16 63.4478.97 20 22.02 24.30 26.87 29.78 33.07 36.79 41.00 45.76 51.16 57.28 72.05 91.02 102.4 21 23.24 25.78 28.68 31.97 3572 39.99 44.87 50.4 56.76 64.00 8 1.70 104.8 118.8 22 24.47 27.3030.54 34.25 38.5143.3949.0155.46 62.87 71.40 92.50 120.4 137.6 23 | 25.72 | 28.85 | 32.45 36.62 41.43 | 47.00 | 53.44 | 60.89 | 69.53 | 79.54 | 104.6 138.3 159 24 | 26.97 3042 | 34.4 3908 | 44.50 | 50.82 58.18 66.76 | 76.79 | ss.50 | 118.2 158.7 164.2 25 28.24 32.03 36.46 41.65 47.731 54.86 63.25 73.11 84.70 98.35 133.3 181.9 212.8 26 29.53 33.6 38.55 44.31 5 1.11 59.16 6868 79.95 93.32 109.2 150.3 208.3 245.7 27 30.82 35.34 40.7| 47.08 54.67 63.71 74.48 87.35 102.7 121.1 169.4 238.5 283.6 28 32.13 3705 42.93 49.97 58.40 68.53 80.70 95.34 | 113.0 134.) 190.7 272.9 3271 29 33.45 3879 45.221 52.97 62.32 73.64 87.35 104. 124.1 148.6 214.6 3 12.1 377.2 30 34.78 40.5 47.58 56.08 66.44 79.06 94.46 113.3 130.3 164.5 241.3 356.8 434.7 40 48.89 60.40 75.4095.03 120.8154.8199.6 259. 3379442.6 767.1 1,342 ,779 50 64.46 84.58 112.8 152.7 209.3 290.31 406.5 573.8 8 15.1 1,164 2.400 4.995 7.218 Print Done