Question: Chapter 11 Homework Assignment 1 Saved He 2.5 points E11-4 (Algo) Calculating Accounting Rate of Return, Payback Period, Net Present Value, Estimating Internal Rate

Chapter 11 Homework Assignment 1 Saved He 2.5 points E11-4 (Algo) Calculating Accounting Rate of Return, Payback Period, Net Present Value, Estimating Internal Rate of Return [LO 11-1, 11-2, 11-3, 11-4] Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows: eBook Hint Initial investment (2 limos) Useful life $ 660,000 10 years Salvage value $ 200,000 Print Annual net income generated LLT's cost of capital $ 53,460 138 References Assume straight line depreciation method is used. Required: Help LLT evaluate this project by calculating each of the following: 1. Accounting rate of return. 2. Payback period. 3. Net present value. 4. Without making any calculations, determine whether the IRR is more or less than 13%.

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