$($Click the icon to view the future value annuity table.$)$

$($Click the icon to view the future value table.$)$

Read the requirements.

The payback period $($in years$)$ is

$($Round the percentage to the nearest tenth percent.$)$

The ARR $($accounting rate of return$)$ is

Requirements

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.$)$

Recommend whether the company should invest in this project.River Wild is considering purchasing a water park in Charleston comma South Carolina$,$ for $ $2$ comma $200$ comma $000.$ The new facility will generate annual net cash inflows of $ $520$ comma $000$ for ten years. Engineers estimate that the facility will remain useful for ten 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 $10\%$ hurdle rate on investments of this nature.

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Part $1$

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

$.$