Water WorldWater World is considering purchasing a water park in Atlanta, Georgia, for $ 1 comma 920 comma 000$1,920,000. The new facility will generate annual net cash inflows of $ 475 comma 000$475,000 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, and its stockholders demand an annual return of 1212% on investments of this nature.

Water World 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 (Click the icon to view the Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) 12% on investments this nature. F(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 -X 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 0.971 0.942 0.915 0.889 0.864 0.840 0.816 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 0.592 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 0.942 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 0.711 0.665 0.623 0.583 0.547 0.513 0.452 0.400 0.376 0.354 0.314 0.279 8 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.404 0.351 0.327 0.305 0.266 0.233 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 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.322 0.270 0.247 0.227 0.191 0.162 11 0.896 0.804 0.722 0.650 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 0.084 0.065 16 0.853 0.728 0.623 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.163 0.123 0.107 0.093 0.071 0.054 17 0.844 0.714 0.605 0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.146 0.108 0.093 0.080 0.060 0.045 18 0.836 0.700 0.587 0.494 0.416 0.350 0.296 0.250 0.212 0.180 0.130 0.095 0.081 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 0.060 0.043 0.031 20 0.820 0.673 0.554 0.456 0.377 0.312 0.258 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 0.359 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 0422 0.342 0.278 0.226 0.184 0.150 0.123 0.083 0.056 0.046 0.038 0.026 0.018 23 0.795 0.634 0.507 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 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 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 0.009 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 0.020 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 Print Done - X Reference Future Value of $1 Periods 1% 2% 3% 4% 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 1.090 1.100 1.120 1.140 1.150 2 1.020 1.040 1.061 1.082 1.103 1.124 1.145 1.166 1.188 1.210 1.254 1.300 1.323 1.482 1.030 1.061 1.093 1.125 1.158 1.191 1.225 1.260 1.295 1.331 1.405 1.521 4 1.041 1.082 1.126 1.170 1.216 1.262 1.311 1.360 1412 1.464 1.574 1.689 1.749 5 1.051 1.104 1.159 1.217 1.276 1.338 1.403 1.469 1.539 1.611 1.762 1.925 2.011 6 1.062 1.126 1.194 1.265 1.340 1419 1.501 1.587 1.677 1.772 1.974 2.195 2.313 7 1.072 1.149 1.230 1.316 1.407 1.504 1.606 1.714 1.828 1.949 2.211 2502 2.660 1.172 8 1.083 1.267 1.369 1.477 1.594 1.718 1.851 1.993 2.144 2.476 2.853 3.059 1.094 1.195 1.305 1.423 1.551 1.689 1.838 1.999 2.172 2.358 2.773 3.252 3.518 10 1.105 1.219 1.344 1.480 1.629 1.791 1.967 2.159 2367 2.594 3.106 3.707 4.046 2.105 11 1.116 1.243 1.384 1.539 1.710 1.898 2.332 2.580 2.853 3.479 4,226 4.652 4.818 12 1.127 1.268 1.426 1.601 1.796 2012 2.252 2.518 2.813 3.138 3.896 5.350 2.133 3.066 6.153 13 1.138 1.294 1.469 1.665 1.886 2410 2.720 3.452 4,363 5.492 1.513 14 1.149 1.319 1.732 1.980 2.261 2579 2.937 3.342 3.798 4.887 6.261 7.076 2.397 7,138 15 1.161 1.346 1.558 1.801 2079 2759 3.172 3.642 4.177 5.474 8.137 16 1.173 1.373 1.605 1.873 2.183 2.540 2.952 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 9.276 10.76 18 1.196 1428 1.702 2.026 2.407 2854 3.380 3.996 4.717 5.560 7.690 10.58 12.38 19 1.208 1.457 1.754 2.107 2527 3.026 3.617 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 1.516 21 1.232 1.860 2.279 2.786 3.400 4.141 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 1.577 23 1.257 1.974 2.465 3.072 3.820 4.741 5.871 7.258 8.954 13.55 20.36 24.89 4.049 24 1.270 1.608 2.033 2.563 3.225 5.072 6.341 7.911 9.850 15.18 23.21 28.63 25 1.282 1.641 2.094 2.666 3.386 4.292 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 6.214 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 4.116 5.418 7.114 9.317 12.17 15.86 26.75 44.69 57.58 30 1.348 1.811 2427 3.243 4,322 5.743 7.612 10.06 13.27 17.45 29.96 50.95 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 Print Done - X Reference Present Value of Ordinary Annuity of $1 Periods 1 % 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% 0.862 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 0.847 0.833 2 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.690 1.647 1.626 1.605 1.566 1.528 3 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.402 2.322 2.283 2.246 2.174 2.106 3.902 3.808 3.717 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 4.713 5 4.853 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.352 3.274 3.127 2.991 6 5.795 5.601 5.417 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 5.786 5.206 4,288 7 6.728 6.472 6.230 6.002 5.582 5.389 5.033 4.868 4,564 4.160 4.039 3.812 3.605 6.733 5.747 4,639 8 7,652 7.325 7.020 6.463 6.210 5.971 5.535 5.335 4.968 4,487 4,344 4.078 3.837 4.946 4.607 4.031 9 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.328 4,772 4,303 10 4.192 9.471 8.983 8.530 8.111 7,722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 5.019 4.833 4.494 4,327 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.938 5.453 5.234 5.029 4.656 5.197 4.439 12 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.194 5.660 5.421 4.793 11.348 10.635 13 7.904 5.342 4,533 12.134 9.986 9.394 8.853 8.358 7.487 7.103 6.424 5.842 5.583 4.910 11.296 10.563 14 13.004 12.106 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.724 5.468 5.008 4.611 15 13.865 12.849 11.938 10.380 11.118 9.712 9.108 8.559 8.061 7.606 6.811 6.142 5.847 5.575 5.092 4.675 10.838 4.730 16 14.718 13.578 12.561 11.652 10.106 9.447 8.851 8.313 7.824 6.974 6.265 5.954 5.669 5.162 15.562 14.292 13.166 12.166 13.754 12.659 11.690 17 11.274 10.477 9.763 9.122 8.544 8.022 7.120 6.373 6.047 5.749 5.222 4.775 4.812 18 16.398 14.992 10.828 10.059 9.372 8.756 8.201 7.250 6.467 6.128 5.818 5.273 19 12.085 7.366 17.226 15.678 14.324 13.134 11.158 10.336 9.604 8.950 8.365 6.550 6.198 5.877 5.316 4,844 11.470 10.594 20 18.046 16.351 14.877 13.590 12.462 9.818 9.129 8.514 7.469 6.623 6.259 5.929 5.353 4.870 11.764 10.836 12.042 11.061 12.303 11.272 12.550 11.469 12.783 11.654 10.675 17.011 19.660 17.658 20.456 18.292 18.857 15.415 14.029 15.937 14.451 13.163 16.444 14.857 13.489 16.936 15.247 17.413 15.622 14.094 10.017 21 12.821 9.292 8.649 7,562 6.687 6.312 5.973 5.384 4.891 22 10.201 9.442 8.772 7.645 6.743 6.359 6.011 5.410 4.909 10.37 7.718 6.044 23 9.580 8.883 6.792 6.399 5.432 4.925 13.799 10.529 24 21.243 18.914 9.707 8.985 7.784 6.835 6.434 6.073 5.451 4.937 22.023 19.523 5.467 4.948 25 9.823 9.077 7.843 6.873 6.464 6.097 13.003 11.826 22.795 20.121 14.375 10.810 26 17.877 15.983 9.929 9.161 7.896 6.906 6.491 6.118 5.480 4.956 23.560 20.707 18.327 16.330 18.764 16.663 11.987 10.935 10.027 27 14.643 13.211 9.237 7.943 6.935 6.514 6.136 5.492 4.964 13.406 12.137 11.051 13.59 12.278 11.158 13.765 12.409 28 7.984 4.970 24.316 21.281 14.898 10.116 9.307 6.961 6.534 6.152 5.502 25.066 21.844 25.808 22.396 4.975 29 19.188 16.984 15.141 10.198 9.370 8.022 6.983 6.551 6.166 5.510 19.600 17.292 15.372 4.979 30 11.258 10.274 9.427 8.055 7.003 6.566 6.177 5.517 23.115 19.793 17.159 15.046 13.332 11.925 40 32.835 27.355 4,997 10.757 9.779 8.244 7.105 6.642 6.233 5.548 Print Done st LO - X i Reference Future Value of Ordinary Annuity of $1 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 1.000 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 2.010 2.020 2.030 2.040 2.050 2.060 2.070 2.080 2.090 2.100 2.120 2.140 2.150 3 3.030 3.060 3.091 3.122 3.153 3.184 3.215 3.246 3.278 3.310 3.374 3.440 3.473 4.184 4.060 4.122 4.246 4.310 4.375 4.440 4.506 4.573 4.641 4.779 4.921 4.993 5 5.101 5.204 5.309 5416 5.526 5.637 5.751 5.867 5.985 6.105 6.353 6.610 6.742 6 6.152 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 7.434 7.214 7.662 7.898 8.142 8.394 8.654 8.923 9.200 9.487 10.09 10.73 11.07 8 8.286 8.583 8.892 9.214 9.549 9.897 10.260 10.64 11.03 11.44 12.30 13.23 13.73 9.755 9.369 10.16 10.58 11.03 11.49 11.98 12.49 13.02 13.58 14.78 16.09 16.79 13.18 10 10.46 10.95 11.46 12.01 12.58 13.82 14.49 15.19 15.94 17.55 19.34 20.30 11 11.57 12.17 12.81 13.49 14.21 14.97 15.78 16.65 17.56 18.53 20.65 23.04 24.35 12 12.68 13.41 14.19 15.03 15.92 16.87 17.89 18.98 20.14 21.38 24.13 27.27 29.00 13 13.81 14.68 15.62 16.63 17.71 18.88 20.14 21.50 22.95 24.52 28.03 32.09 34.35 14 14.95 15.97 17.09 18.29 19.60 21.02 22.55 24.21 26.02 27.98 32.39 37.58 40.50 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 50.98 16 17.26 18.64 20.16 21.82 23.66 25.67 27.89 30.32 33.00 35.95 42.75 55.72 36.97 17 18.43 20.01 21.76 23.70 25.84 28.21 30.84 33.75 40.54 48.88 59.12 65.08 37.45 41.30 18 19.61 21.41 23.41 25.65 28.13 30.91 34.00 45.60 55.75 68.39 75.84 25.12 19 20.81 22.84 27.67 30.54 33.76 37.38 41.45 46.02 51.16 63.44 78.97 88.21 20 24.30 41.00 51.16 91.02 22.02 26.87 29.78 33.07 36.79 45.76 57.28 72.05 102.4 44,87 118.8 21 23.24 25.78 28.68 31.97 35.72 39.99 50.42 56.76 64.00 81.70 104.8 22 24.47 27.30 30.54 34.25 38.51 43.39 49.01 55.46 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 79.54 104.6 138.3 159.3 24 26.97 30.42 34.43 39.08 44.50 50.82 58.18 66.76 76.79 88.50 118.2 158.7 184.2 41.65 25 28.24 32.03 36.46 47.73 54.86 63.25 73.11 84.70 98.35 133.3 181.9 212.8 26 29.53 33.67 38.55 44.31 51.11 59.16 68.68 79.95 93.32 109.2 150.3 208.3 245.7 27 30.82 35.34 40.71 47.08 54.67 63.71 74.48 87.35 102.7 121.1 169.4 238.5 283.6 28 32.13 37.05 42.93 49.97 58.40 68.53 80.70 95.34 113.0 134.2 190.7 272.9 327.1 45.22 29 33.45 38.79 52.97 62.32 73.64 87.35 104.0 124.1 148.6 214.6 312.1 377.2 40.57 47.58 30 34.78 56.08 66.44 79.06 94.46 113.3 136.3 164.5 241.3 356.8 434.7 1,342 1,779 40 60.40 48.89 75.40 95.03 120.8 154.8 199.6 259.1 337.9 442.6 767.1 Print Done stLO X 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