Water City is considering purchasing a water park in Atlanta, Georgia, for $1,920,000. The new facility will generate annual net cash inflows of $475,000 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, X.X.) Payback years 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. Present Value of $1 Periods pl 1% 2% 0.990 0.980 0.980 0.961 0.971 0.942 0.961 0.924 0.951 0.906 2 3 4 3% 0.971 0.943 0.915 0.888 0.863 4% 0.962 0.925 0.889 0.855 0.822 5% 0.952 0.907 0.864 0.823 0.784 6% 0.943 0.890 0.840 7% 0.935 0.873 0.816 0.763 0.713 8% 0.926 0.857 0.794 0.735 0.681 9% 0.917 0.842 0.772 0.708 0.650 10% 0.909 0.826 0.751 0.683 0.621 12% 0.893 0.797 0.712 0.636 0.567 14% 0.877 0.769 0.675 0.592 0.519 15% 0.870 0.756 0.658 0.572 0.497 16% 0.862 0.743 0.641 0.552 18% 20% 0.847 0.833 0.718 0.694 0.609 0.579 0.516 0.482 0.437 0.402 0.792 5 0.747 0.476 6 7 8 0.942 0.888 0.933 0.871 0.923 0.853 0.914 0.837 0.905 0.820 0.837 0.813 0.789 0.766 0.744 0.790 0.760 0.731 0.703 0.676 0.746 0.705 0.711 0.665 0.677 0.627 0.645 0.592 0.614 0.558 0.666 0.623 0.582 0.544 0.508 0.630 0.583 0.540 0.500 0.463 0.596 0.547 0.502 0.460 0.422 0.564 0.507 0.513 0.452 0.467 0.404 0.424 0.361 0.386 0.322 0.456 0.400 0.351 0.308 0.270 0.432 0.376 0.327 0.284 0.247 0.410 0.354 0.305 0.263 0.227 0.370 0.335 0.314 0.279 0.266 0.233 0.225 0.194 0.191 0.162 9 10 11 12 13 14 15 0.896 0.804 0.887 0.788 0.879 0.773 0.870 0.758 0.861 0.743 0.722 0.701 0.681 0.661 0.642 0.650 0.625 0.601 0.577 0.585 0.527 0.557 0.497 0.530 0.469 0.505 0.442 0.481 0.417 0.475 0.444 0.415 0.388 0.362 0.429 0.397 0.368 0.340 0.315 0.388 0.356 0.326 0.299 0.275 0.350 0.287 0.319 0.257 0.290 0.229 0.205 0.239 0.183 0.237 0.208 0.182 0.160 0.140 0.215 0.187 0.163 0.141 0.123 0.195 0.168 0.145 0.125 0.108 0.162 0.135 0.137 0.112 0.116 0.093 0.099 0.078 0.084 0.065 0.263 0.555 0.123 16 17 18 19 20 0.853 0.728 0.844 0.714 0.836 0.700 0.828 0.686 0.820 0.673 0.623 0.605 0.587 0.570 0.554 0.534 0.513 0.494 0.475 0.456 0.458 0.394 0.436 0.371 0.416 0.350 0.396 0.331 0.377 0.312 0.339 0.317 0.296 0.277 0.258 0.292 0.270 0.250 0.232 0.215 0.252 0.231 0.212 0.194 0.178 0.218 0.163 0.198 0.146 0.180 0.130 0.164 0.116 0.149 0.104 0.108 0.095 0.083 0.073 0.107 0.093 0.081 0.070 0.061 0.093 0.080 0.069 0.060 0.051 0.071 0.054 0.060 0.045 0.051 0.038 0.043 0.031 0.037 0.026 0.242 0.226 21 22 23 24 25 0.811 0.803 0.795 0.788 0.780 0.660 0.647 0.634 0.622 0.610 0.538 0.522 0.507 0.492 0.478 0.439 0.422 0.406 0.390 0.375 0.359 0.294 0.342 0.278 0.326 0.262 0.310 0.247 0.295 0.233 0.211 0.199 0.184 0.170 0.158 0.146 0.164 0.150 0.138 0.126 0.116 0.135 0.093 0.123 0.083 0.112 0.074 0.102 0.066 0.092 0.059 0.064 0.056 0.049 0.043 0.038 0.053 0.046 0.040 0.035 0.030 0.044 0.038 0.033 0.028 0.024 0.031 0.022 0.026 0.018 0.022 0.015 0.019 0.013 0.016 0.010 0.197 0.184 0.135 0.125 26 27 28 29 30 0.772 0.764 0.757 0.749 0.742 0.598 0.586 0.574 0.563 0.552 0.464 0.450 0.437 0.424 0.412 0.361 0.347 0.333 0.321 0.308 0.281 0.268 0.255 0.243 0.231 0.220 0.207 0.196 0.185 0.174 0.172 0.161 0.150 0.141 0.131 0.116 0.107 0.099 0.106 0.098 0.090 0.082 0.075 0.084 0.053 0.076 0.047 0.069 0.042 0.063 0.037 0.057 0.033 0.033 0.029 0.026 0.022 0.020 0.026 0.023 0.020 0.017 0.015 0.021 0.018 0.016 0.014 0.012 0.014 0.009 0.0110.007 0.010 0.006 0.008 0.005 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 0.013 0.009 0.003 0.001 0.001 0.001 Future Value of $1 Periods 1 2 3 4 5 1% 1.010 1.020 1.030 1.041 1.051 2% 1.020 1.040 1.061 1.082 1.104 3% 1.030 1.061 1.093 1.126 1.159 4% 1.040 1.082 1.125 1.170 1.217 15% | 6% 1.050 1.060 1.103 1.124 1.158 1.191 1.216 | 1.262 1.276 1.338 7% 8% 1.070 1.080 1.145 1.16 1.225 11.260 1.311 1.360 1.403 1.469 9% 1.090 1.188 1.295 1.412 1.539 10% 1.100 1.210 1.331 1.464 1.611 12% 1.120 1.254 1.405 1.574 1.762 14% 15% 1.140 1.150 1.300 1.323 1.482 1.521 1.689 1.749 1.925 | 2.011 6 7 8 9 10 1.062 1.072 1.083 1.094 1.105 1.126 1.149 1.172 1.195 1.219 1.194 1.230 1.267 1.305 1.344 1.265 1.316 1.369 1.423 1.480 1.340 1.407 1.477 1.551 1.629 1.419 1.504 1.594 1.689 1.791 1.501 1.587 1.606 1.714 1.718 11.851 1.838 1.999 1.967 2.159 1.677 1.772 1.974 1.828 1.949 2.211 1.993 | 2.144 | 2.476 2.172 | 2.358 | 2.773 2.367 2.594 3.106 2.195 12.313 2.502 | 2.660 2.853 3.059 3.252 3.518 3.707 4.046 11 12 13 14 15 1.116 1.127 1.138 1.149 1.161 1.243 1.384 1.268 1.426 1.294 | 1.469 1.319 1.513 1.346 1.558 1.539 1.601 1.665 1.732 1.801 1.710 1.898 1.796 2.012 1.886 2.133 1.980 | 2.261 2.079 | 2.397 2.105 2.252 2.410 2.579 2.759 2.332 2.518 2.720 2.937 3.172 2.580 2.853 3.479 14.226 4.652 2.813 3.138 3.896 4.818 5.350 3.066 3.452 | 4.363 5.492 16.153 3.342 3.798 | 4.887 6.261 7.076 3.642 14.177 5.474 7.138 18.137 16 17 18 19 20 1.173 1.184 1.196 1.208 1.220 2.952 3.426 3.159 3.700 3.380 3.996 3.617 4.316 3.870 | 4.661 3.970 14.595 4.328 5.054 4.717 5.560 5.142 6.116 5.604 6.727 6.130 6.866 7.690 8.613 9.646 8.137 9.276 10.58 12.06 13.74 9.358 10.76 12.38 14.23 16.37 1.373 1.605 | 1.873 | 2.183 | 2.540 1.400 1.653 1.948 | 2.292 | 2.693 1.428 1.702 | 2.026 2.407 2.854 1.457 1.754 | 2.107 | 2.527 13.026 1.486 1.806 | 2.191 2.653 | 3.207 1.516 1.860 | 2.279 | 2.786 3.400 1.546 1.916 | 2.370 | 2.925 3.604 1.577 1.974 2.465 3.072 3.820 1.608 | 2.033 | 2.563 3.225 14.049 1.641 | 2.094 | 2.666 3.386 4.292 21 22 23 24 25 1.232 1.245 1.257 1.270 1.282 4.141 4.430 4.741 5.072 5.427 5.034 5.437 5.871 6.341 6.848 6.109 6.659 7.258 7.911 8.623 7.400 8.140 8.954 9.850 10.83 10.80 12.10 13.55 15.18 17.00 15.67 17.86 20.36 23.21 26.46 18.82 21.64 24.89 28.63 32.92 26 27 28 29 30 1.295 1.308 1.321 1.335 1.348 1.673 | 2.157 | 2.772 1.707 | 2.221 | 2.883 1.741 2.288 2.999 1.776 | 2.357 3.119 1.811 2.427 13.243 3.556 14.549 3.733 | 4.822 3.920 5.112 4.116 5.418 4.322 15.743 5.807 6.214 6.649 7.114 7.612 7.396 7.988 8.627 9.317 10.06 9.399 10.25 1.17 12.17 13.27 11.92 13.11 14.42 15.86 17.45 19.04 21.32 23.8 26.75 29.96 30.17 34.39 39.20 44.69 50.95 37.86 43.54 50.07 57.58 66.21 40 1.489 2.208 3.262 | 4.801 7.040 10.29 14.97 21.72 31.41 45.26 93.05 188.9 267.9 50 1.645 2.692 14.384 17.107 11.47 18.42 | 29.46 46.90 74.36 17.4 289.0 700.2 | 1,084 Present Value of Ordinary Annuity of $1 12% 0.893 1.690 2.402 3.037 3.605 14% 0.877 1.647 2.322 2.914 3.433 15% 0.870 1.626 2.283 2.855 3.352 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2.174 2.690 3.127 20% 0.833 1.528 2.106 2.589 2.991 6.230 4.111 4.564 4.968 5.328 5.650 3.889 4.288 4.639 4.946 5.216 3.784 4.160 4.487 4.772 5.019 3.685 4.039 4.344 4.607 4.833 3.498 3.812 4.078 4.303 4.494 3.326 3.605 3.837 4.031 4.192 5.029 5.197 5.938 6.194 6.424 6.628 6.811 5.453 5.660 5.842 6.002 6.142 5.234 5.421 5.583 5.724 5.847 5.342 4.656 4.793 4.910 5.008 5.092 4.327 4.439 4.533 4.611 4.675 5.468 5.575 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 2 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 3 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 5 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 6 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355 7 6.728 6.472 6.002 5.786 5.582 5.389 5.206 5.033 4.868 8 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 9 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 10 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 12 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 13 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.103 14 13.004 12.106 11.296 | 10.563 9.899 9.295 8.745 8.244 7.786 7.367 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.061 7.606 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 17 15.562 14.292 13.166 12.166 | 11.274 10.477 9.763 9.122 8.544 8.022 18 16.398 14.992 | 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 19 17.226 15.678 14.32413.134 12.085 11.158 10.336 9.604 8.950 8.365 20 18.046 16.351 14.877 13.590 | 12.462 | 11.470 10.594 | 9.818 9.129 8.514 21 18.857 17.011 15.415 14.029 12.821 | 11.764 10.836 10.017 9.292 8.649 22 19.660 17.658 15.93714.451 13.163 12.042 11.061 10.201 | 9.442 8.772 23 20.456 18.292 16.444 14.857 13.489 12.303 11.272 | 10.371 9.580 8.883 24 21.24318.914 16.936 15.247 13.799 12.550 11.469 10.529 9.707 8.985 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 26 22.795 20.12117.877 15.983 14.375 13.003 | 11.826 10.810 9.929 9.161 27 23.560 20.707 | 18.327 16.330 14.643 13.211 11.987 10.935 | 10.027 9.237 28 24.316 21.28118.764 16.663 14.898 13.406 12.137 11.051 10.116 9.307 29 25.066 21.844 19.188 16.984 15.141 13.591 12.278 11.158 10.1989.370 30 25.808 22.396 19.600 17.292 15.372 13.765 12.409 11.258 10.274 9.427 40 32.835 27.355 23.115 19.793 17.159 15.046 13.332 11.925 10.757 9.779 50 39.196 31.424 25.730 21.482 | 18.256 15.762 13.801 | 12.233 10.962 9.915 6.974 7.120 7.250 7.366 7.469 6.265 6.373 6.467 5.954 6.047 6.128 6.198 6.259 5.669 5.749 5.818 5.877 5.929 5.162 5.222 5.273 5.316 5.353 4.730 4.775 4.812 4.844 4.870 6.550 6.623 7.562 7.645 7.718 7.784 7.843 6.687 6.743 6.792 6.835 6.312 6.359 6.399 6.434 6.464 5.973 6.011 6.044 6.073 6.097 5.384 5.410 5.432 5.451 5.467 4.891 4.909 4.925 4.937 4.948 6.873 7.896 7.943 7.984 8.022 8.055 6.906 6.935 6.961 6.983 7.003 6.491 6.514 6.534 6.551 6.566 6.118 6.136 6.152 6.166 6.177 5.480 5.492 5.502 5.510 5.517 4.956 4.964 4.970 4.975 4.979 8.244 7.105 6.642 6.233 5.548 4.997 8.304 7.133 6.661 6.246 5.554 4.999 Periods 1 2 3 4 5 1% 1.000 2.010 3.030 4.060 5.101 Future Value of Ordinary Annuity of $1 2% 3% 4% 15% 6% 17% 8% 9% 10% 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2.020 2.030 2.040 2.050 2.060 2.070 2.080 2.090 | 2.100 3.060 3.091 13.122 13.153 3.184 3.215 3.246 3.278 3.310 4.122 14.184 | 4.246 14.310 14.375 4.440 4.506 4.573 4.641 5.204 5.309 5.416 5.526 5.637 5.751 5.867 5.985 6.105 12% 1.000 2.120 3.374 4.779 6.353 14% 1.000 2.140 3.440 4.921 6.610 15% 1.000 2.150 3.473 4.993 6.742 6 7 8 9 10 6.152 7.214 8.286 9.369 10.46 6.308 7.434 8.583 9.755 10.95 6.468 6.633 17.662 17.898 8.892 9.214 10.16 10.58 11.46 12.01 7.523 9.200 11.03 13.02 15.19 7.716 9.487 1.44 13.58 15.94 8.115 10.09 12.30 14.78 17.55 8.536 10.73 13.23 16.09 19.34 8.754 11.07 13.73 16.79 20.30 11 12 13 14 15 6.802 6.975 7.153 7.336 8.142 8.394 8.654 8.923 9.549 9.897 | 10.260 | 10.64 1.03 11.49 11.98 12.49 12.58 13.18 13.82 14.49 14.21 14.97 15.78 16.65 15.92 16.87 17.89 18.98 17.71 18.88 20.14 21.50 19.60 | 21.02 22.55 24.21 21.58 23.28 25.13 27.15 23.66 25.67 27.89 30.32 25.84 28.21 30.84 33.75 28.13 30.91 34.00 37.45 30.54 33.76 37.38 41.45 33.07 36.79 41.00 45.76 17.56 20.14 22.95 26.02 29.36 18.53 20.65 21.38 24.13 24.52 | 28.03 27.98 32.39 31.77 37.28 23.04 27.27 32.09 37.58 43.84 1.57 12.17 12.81 13.49 12.68 13.41 14.19 15.03 13.81 14.68 15.62 | 16.63 14.95 15.97 17.09 18.29 16.10 17.29 18.60 20.02 17.26 18.64 | 20.16 | 21.82 18.43 20.01 21.76 23.70 19.61 21.41 23.41 25.65 20.81 22.84 25.12 | 27.67 22.02 | 24.30 | 26.87 | 29.78 24.35 29.00 34.35 40.50 47.58 16 17 18 19 20 33.00 36.97 41.30 46.02 51.16 35.95 40.54 45.60 51.16 57.28 42.75 48.88 55.75 63.44 72.05 50.98 59.12 68.39 78.97 91.02 55.72 65.08 75.84 88.21 102.4 21 22 23 24 25 23.24 24.47 25.72 26.97 28.24 44.87 49.01 53.44 58.18 63.25 50.42 55.46 60.89 66.76 73.11 56.76 62.87 69.53 76.79 84.70 64.00 71.40 79.54 88.50 98.35 81.70 92.50 104.6 18.2 133.3 104.8 120.4 138.3 158.7 181.9 118.8 137.6 159.3 184.2 212.8 25.78 | 28.68 | 31.97 27.30 30.54 34.25 28.85 32.45 36.62 30.42 34.43 39.08 32.03 36.46 | 41.65 33.67 38.55 44.31 35.34 40.71 47.08 37.05 42.93 49.97 38.79 | 45.22 52.97 40.57 47.58 56.08 35.72 139.99 38.51] 43.39 41.43 147.00 44.50 50.82 47.73 54.86 51.11 59.16 54.67 63.71 58.40 68.53 62.32 | 73.64 66.44 79.06 26 27 28 29 30 29.53 30.82 32.13 33.45 34.78 68.68 79.95 74.48 87.35 80.70 95.34 87.35 | 104.0 94.46 13.3 93.32 102.7 113.0 124.1 136.3 109.2 121.1 134.2 148.6 164.5 150.3 169.4 190.7 214.6 241.3 208.3 238.5 272.9 312.1 356.8 245.7 283.6 327.1 377.2 434.7 40 48.89 60.40 75.40 95.03 120.8 154.8 199.6 259.1 337.9 442.6 767.1 1,342 1,779 4,995 | 7,218 50 64.46 84.58 112.8 152.7 209.3 290.3 406.5 573.8 815.1 1,164 2,400