Splash city is considering purchasing a water park in atlanta, georgia, for $1,910,000. the new facility will generate annual net cash inflows of $483,000 for eight years. engineers estimate that the new facilities will remain useful for eight 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.

requirements:

1. compute the payback, the arr, the npv, the irr, and the profitability index of this investment.

2. recommend whether the company should invest in this project.