Balloons By Sunset (BBS) is considering the purchase of two new hot air balloons so...
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Accounting
Balloons By Sunset BBS is considering the purchase of two new hot air balloons so that it can expand its desert sunset tours. Various information about the proposed investment follows: Future Value of $ Present Value of $ Future Value Annuity of $ Present Value Annuity of $ Note: Use appropriate factors from the tables provided. Initial investment for two hot air balloons Useful life Salvage value Annual net income generated BBSs cost of capital $ years $ $ Assume straight line depreciation method is used. Required: Help BBS evaluate this project by calculating each of the following: Accounting rate of return. Note: Round your answer to decimal places. Payback period. Note: Round your answer to decimal places. Net present value NPV Note: Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar. Recalculate the NPV assuming BBSs cost of capital is percent. Note: Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar. 
Balloons By Sunset BBS is considering the purchase of two new hot air balloons so that it can expand its desert sunset tours. Various
information about the proposed investment follows: Future Value of $ Present Value of $ Future Value Annuity of $ Present Value
Annuity of $
Note: Use appropriate factors from the tables provided.
Initial investment for two hot air balloons
Useful life
Salvage value
Annual net income generated
BBSs cost of capital
$
years
$
$
Assume straight line depreciation method is used.
Required:
Help BBS evaluate this project by calculating each of the following:
Accounting rate of return.
Note: Round your answer to decimal places.
Payback period.
Note: Round your answer to decimal places.
Net present value NPV
Note: Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to
nearest whole dollar.
Recalculate the NPV assuming BBSs cost of capital is percent.
Note: Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to
nearest whole dollar.
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