Water NationWater Nation

is considering purchasing a water park in

Fort Worth comma TexasFort Worth, Texas,

for

$ 1 comma 950 comma 000$1,950,000.

The new facility will generate annual net cash inflows of

$ 505 comma 000$505,000

for

eighteight

years. Engineers estimate that the facility will remain useful for

eighteight

years and have no residual value. The company uses straight-line depreciation. Its owners want payback in less than five years and an ARR of

1212%

or more. Management uses a

1414%

hurdle rate on investments of this nature.

What is the payback period?

What is the ARR%?

Net present value $?

The IRR?

Recommend whether the company should invest in this project.