Playtime, Inc. is considering purchasing an amusement park in El Paso, Texas, for \(\$ 2,000,000\). The new facility will generate annual net cash inflows of \(\$ 520,000\) for eight years. Engineers estimate that the facility will remain useful for eight years and have a residual value of \(\$ 200,000\). The company uses straight-line depreciation, and its stockholders demand an annual return of \(12 \%\) on investments of this nature.

Requirements 

1. Compute the payback period, the accounting rate of return, and the net present value of this investment.

2. Make a recommendation whether the company should invest in this project.