Splash Planet is considering purchasing a water park for $$1,880,000.$ The new facility will generate annual net cash inflows of $$475,000$ for $8$ years. Engineers estimate that the facility will remain useful for $8$ years and have no residual value. The company uses straight$-$line depreciation, and its stockholders demand an annual return of $10\%$ on investments of this nature.

Read the requirements.

View the Present Value of $$1$ table.

View the Future Value of $$1$ table.

View the Present Value of Ordinary Annuity of $$1$ table.

View the Future Value of Ordinary Annuity of $$1$ table.

$$ Expected annual net cash inflow

$=$

Payback

$$$$475,000$

$=$ years

Next, determine the formula and calculate the accounting rate of return $($ARR$).($Round the percentage to the nearest tenth percent, $x.x\%.)$

Average annual oberatinc inrnmo

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