E11-4 (Algo) Calculating Accounting Rate of Return, Payback Period, Net Present Value, Estimating Internal Rate of Retur

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E11 4 Algo Calculating Accounting Rate Of Return Payback Period Net Present Value Estimating Internal Rate Of Retur 1 (26.77 KiB) Viewed 77 times

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: Initial investment (2 limos) Useful life Salvage value Annual net income generated La coat of capital $1,740,000 10 years $ 140,000 $ 172,260 150 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 15%.