Water World is considering purchasing a water park in Newark, New Jersey, for $2,050,000. The new facility will generate annual net cash inflows of $525,000 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. Its owners want payback in less than five years and an ARR of 12% or more. Management uses a 14% hurdle rate on investments of this nature. (Click the icon to view the present value annuity table.) (Click the icon to view the present value table.) (Click the icon to view the future value annuity table.) (Click the icon to view the future value table.) Read the requirements Requirement 1. Compute the payback period, the ARR, the NPV, and the approximate IRR of this investment. (If you use the tables to compute the IRR, answer with the closest interest rate shown in the tables.) (Round the payback period to one decimal place.) The payback period (in years) is Enter any number in the edit fields and then click Check Answer. Clear All Check Answer Get More Help 483 1092 Reference - X Wat net resi orn 16% Red Red tabl plad Present Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 18% 20% Period 1 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 Period 2 1.970 1.942 1.913 1.886 1.859 1.833 1.783 1.736 1.6901.647 1.605 1.566 1.528 Period 3 2.941 2.884 2.829 2.775 2.723 2.673 2.577 2.487 2.402 2.322 2.246 2.174 2.106 Period 4 3.902 3.808 3.717 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2.798 2.690 2.589 Period 5 4.853 4.713 4.580 4.452 4.329 4.212 3.993 3.791 3.605 3.433 3.274 3.127 2.991 Period 6 5.795 5.601 5.417 5.2425.076 4.917 4.623 4.355 4.111 3.889 3.685 3.498 3.326 Period 7 6.728 6.472 6.230 6.002 5.786 5.5825.206 4.868 4.564 4.288 4.039 3.812 3.605 Period 8 7.652 7.325 7.020 6.733 6.463 6.210 5.747 5.335 4.968 4.639 4,344 4.078 3.837 Period 9 8.566 8.162 7.786 7.435 7.108 6.802 6.247 5.759 5.328 4.946 4.607 4.303 4.031 Period 10 9.471 8.983 8.530 8.111 7.722 7.360 6.710 6.145 5.650 5.216 4.833 4.494 4.192 Period 11 | 10.368 9.787 9.253 8.760 8.306 7.887 7.139 6.495 5.938 5.453 5.0294.656 4.327 Period 12 11.255 10.575 9.954 9.385 8.863 8.384 7.536 6.814 6.1945.660 5.197 4.793 4.439 Period 13 | 12.134 11.348 10.635 9.986 9.394 8.853 7.904 7.103 6.424 5.842 5.342 4.910 4.533 Period 14 13.004 12.106 11.296 10.563 9.899 9.295 8.244 7.367 6.6286.002 5.468 5.008 4.611 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 8.5597.606 6.811 6.142 5.575 5.092 4.675 4.870 Period 2018.046 16.351 14.877 13.590 12.462 11.470 9.818 8.5147.469 6,623 5.929 5.353 Period 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 6.873 6.097 5.467 4.948 Period 30 25.808 22.396 19.600 17.292 15.372 13.765 11.258 | 9.4278.055 7.0036.1775.517 4.979 4.997 Period 40 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 8.244 7.105 6.233 5.548 The Print Done Ente nce a et si 3.153 Future Value of Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% Period 1 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 2.030 2.040 2.050 2.060 2.080 2.100 2.120 2.140 2.160 Period 3 3.030 3.060 3.091 3.122 3.184 3.246 3.310 3.374 3.440 3.506 Period 4 4.060 4.122 4.184 4.246 4.310 4.375 4.506 4.641 4.779 4.921 5.066 Period 5 5.101 5.204 5.309 5.416 5.526 5.637 5.867 6.105 6.353 6.610 6.877 Period 6 6.152 6.308 6.468 6.633 6.802 6.975 7.336 7.716 8.115 8.536 8.977 Period 7 7.214 7.434 7.662 7.898 8.142 8.394 8.923 9.487 10.089 10.730 11.414 Period 8 8.286 8.583 8.892 9.214 9.549 9.897 10.637 11.436 12.300 13.233 14.240 Period 9 9.369 9.755 10.159 10.583 11.027 11.491 12.488 13.579 14.776 16.085 17.519 Period 10 10.462 10.950 11.464 12.006 12.578 13.181 14.487 15.937 17.549 19.337 21.321 2 Period 11 11.567 12.169 12.808 13.486 14.207 14.972 16.645 18.531 20.655 23.045 25.733 Period 12 12.683 13.412 14.192 15.026 15.917 16.870 18.977 21.384 24.133 27.271 30.850 Period 13 13.809 14.680 | 15.618 16.627 17.713 18.882 21.495 24.523 28.029 32.089 36.786 Period 14 14.947 15.974 17.086 18.292 | 19.599 21.015 24.215 27.975 32.393 37.581 43.672 Period 15 16.097 17.29318.599 20.024 21.579 23.276 27.152 31.772 37.280 43.842 51.660 6 Period 20 22.019 24.297 26.870 29.778 33.066 36.786 45.762 57.275 72.052 91.025 115.380 Period 25 28.243 32.03036.459 41.646 | 47.727 54.865 73.106 98.347 133.334 181.871 249.2143 Period 30 7 34.785 40.568 47.575 56.085 66.439 79.058 113.283 164.494 241.333 356.787 530.312 Period 40 48.886 60.402 75,401 95.026 120.800 154.762 259.057 442.593767.091 1,342.025 2,360.757 4.1 ee ACON Print Done Wat net resi orn Red Periods 1% Period 1 0.990 Period 2 0.980 Period 3 0.971 Period 4 0.961 Period 5 0.951 Period 6 0.942 Period 7 0.933 Period 8 0.923 Period 9 0.914 Period 10 0.905 Red tabl plad Present Value of $1 2% 3% 4% 5% 6% 8% 10% 12% 14% 16% 0.980 18% 0.971 0.962 0.952 0.943 0.26 0.909 0.893 0.877 0.862 0.847 0.83 20% 0.961 0.943 0.925 0.907 0.890 0.857 0.826 0.797 0.769 0.743 0.7180.69 0.9420.915 0.889 0.864 0.840 0.794 0.751 0.712 0.675 0.641 0.609 0.57 0.924 0.888 0.855 0.823 0.792 0.735 0.683 0.636 0.592 0.552 0.516 0.48 0.906 0.863 0.822 0.784 0.747 0.681 0.621 0.567 0.519 0.476 0.437 0.40: 0.888 0.837 0.790 0.746 0.705 0.630 0.564 0.507 0.456 0.410 0.370 0.33 0.871 0.813 0.760 0.711 0.665 0.583 0.513 0.452 0.400 0.354 0.314 0.27 0.853 0.789 0.731 0.677 0.627 0.540 0.467 0.4040.351 0.305 0.266 0.23 0.837 0.766 0.703 0.645 0.592 0.500 0.424 0.361 0.308 0.263 0.225 0.19 0.820 0.744 0.676 0.614 0.558 0.463 0.386 0.322 0.270 0.227 0.191 0.16 0.804 0.722 0.650 0.585 0.527 0.429 0.350 0.287 0.237 0.195 0.162 0.13 0.788 0.701 0.625 0.557 0.497 0.397 0.319 0.257 0.208 0.168 0.137 0.111 0.773 0.681 0.601 0.530 0.469 0.368 0.290 0.229 0.182 0.145 0.116 0.09 0.758 0.661 0.577 0.505 0.442 0.340 0.263 0.205 0.160 0.125 0.099 0.071 0.743 0.642 0.555 0.481 0.417 0.315 0.239 0.183 0.140 0.108 0.084 0.06 0.673 0.554 0.456 0.377 0.312 0.215 0.149 0.104 0.073 0.051 0.037 0.02 0.610 0.478 0.375 0.295 0.233 0.146 0.092 0.059 0.038 0.024 0.016 0.01 0.552 0.412 0.308 0.231 0.174 0.099 0.057 0.033 0.0200.0120.007 0.00 0.453 0.307 0.208 0.142 0.097 0.046 0.022 0.011 0.005 0.003 0.001 0.00 The Period 110.896 Period 12 0.887 Period 130.879 Period 14 0.870 Period 150.861 Period 20 0.820 Period 25 0.780 Period 30 0.742 Period 400.672 Print Done Ente Future Value of $1 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 1.010 1.020 1.030 1.041 1.051 2% 3% 1.020 1.030 1.040 1.061 1.061 1.093 1.082 1.126 1.104 1.159 1.126 1.194 1.149 1.230 1.1721.267 1.195 1.305 1.219 1.344 4% 1.040 1.082 1.125 1.170 1.217 1.062 1.072 1.083 1.094 1.105 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12 Period 13 Period 14 Period 15 Period 20 Period 25 Period 30 Period 40 5% 6% 8% 10% 12% 14% 16% 18% 1.050 1.060 1.080 1.100 1.120 1.140 1.160 1.180 1.103 1.124 1.166 1.210 1.254 1.300 1.346 1.392 1.158 1.191 1.260 1.331 1.405 1.482 1.561 1.643 1.216 1.262 1.360 1.464 1.574 1.689 1.811 1.939 1.276 1.338 1.469 1.611 1.762 1.925 2.100 2.288 1.340 1.419 1.587 1.772 1.974 2.195 2.436 2.700 1.407 1.504 1.714 1.949 2211 2.502 2.826 3.185 1.477 1.594 1.851 2.144 2.476 2.853 3.278 3.759 1.551 1.689 1.999 2.318 2.773 3.252 3.803 4.435 1.629 1.791 2.159 2.594 3.106 3.707 4.411 5.234 1.710 1.898 2.332 2.853 3.479 4.226 5.117 6.176 1.796 2.012 2.518 3.138 3.896 4.818 5.936 7288 1.886 2.133 2.720 3.452 4.363 5.492 6.886 8.599 1.980 2.261 2.937 3.797 4.887 6.261 7.988 10.147 2.079 2.397 3.172 4.177 5.474 7.138 9.266 11.974 2.653 3.207 4.661 6.727 9.646 13.743 19.461 27.393 3.386 4.292 6.848 10.83517.000 26.462 40.874 62.669 4.322 5.743 10.063 17.449 29.960 50.950 85.850 143.371 7.040 10.286 21.725 45.259 93.051 188.884 378.721 750.378 1.116 1.127 1.138 1.149 1.161 1.243 1.268 1.294 1.319 1.346 1.265 1.316 1.369 1.423 1.480 1.539 1.601 1.665 1.732 1.801 2.191 2.666 3.243 4.801 1.384 1.426 1.469 1.513 1.558 1.220 1.282 1.348 1.489 1.486 1.641 1.811 2.208 1.806 2.094 2.427 3.262 Print Done e agement uses a 14% hurdle rate on investments of this nature. e icon to view the present value annuity table.) (Click the icon to view the present value table.) - Requirements uus pne 1. Compute the payback period, the ARR, the NPV, and the approximate IRR of this investment. (If you use the tables to compute the IRR, answer with the closest interest rate shown in the tables.) 2. Recommend whether the company should invest in this project. Print Done mber in the edit fields and then click Check