2,205,000 Laurman, Inc. is considering the following project: Required investment in equipment Project life Salvage value 225,000 $ 2,750,000 1,600,000 1,150,000 $ The project would provide net operating income each year as follows: Sales Variable expenses Contribution margin Fixed expenses: Salaries, rent and other fixed out-of pocket costs Depreciation Total fixed expenses Net operating income 520,000 350,000 $ 870,000 280,000 Company discount rate 18% 1. Compute the annual net cash inflow from the project. 2. Complete the table to compute the net present value of the investment. Year(s) 1-7 Now Initial investment Annual cost savings Salvage value of the new machine Total cash flows Discount factor Present value of the cash flows Net present value 1.000 Use Excel's PV function to compute the present value of the future cash flows Deduct the cost of the investment Net present value 3. Use Excel's RATE function to compute the project's internal rate of return 4. Compute the project's payback period. years 5. Compute the project's simple rate of return