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Che Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines Various information about the proposed investment follows: Initial Investment (2 limos) Useful life Salvage value Annual net income generated LIT' cost of capital $1,440,000 10 years $ 130,000 $ 135,360 145 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 14% Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Calculate net present value. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Cash Outflows and negative amounts should be indicated by a minus sign. Round your "Present Values to the nearest whole dollar amount.) Show less Table or Calculator Function: Cash Outflow (Beginning of the Year) Present Value of $1 $ n = (1.440,000) 0 14% 1,440,000 i = Present Value $ Present Value Annuity of $1 Table or Calculator Function: Cash Inflow (for Next 10 Years) n 10 1 = = 14% Table Factor Present Value Present Value of $1 Table or Calculator Function: Cash Inflow (for 10th Year) n = 10 i = 14% Table Factor Present Value Total Net Present Value

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