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Acct 201-Ch.7 take home assignment: 5 points (discretion points) Due date: 10/31/23 at the start of class. Name: Ursus, Incorporated, is considering a project that
Acct 201-Ch.7 take home assignment: 5 points (discretion points) Due date: 10/31/23 at the start of class. Name: Ursus, Incorporated, is considering a project that would have a nine-year life and would require a $3,132,000 investment in equipment. At the end of nine years, the project would terminate, and the equipment would have no salvage value. The project would provide net operating income each year as follows (Ignore income taxes.): Sales Variable expenses Contribution margin Fixed expenses: Fixed out-of-pocket cash expenses $ 270,000 348,000 Depreciation Net operating income 618,000 $ 232,000 All of the above items, except for depreciation, represent cash flows. The company's required rate of return is 10%. Required: 1. Compute the project's net present value. Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. $ 2,400,000 1,550,000 850,000 2. Compute the project's internal rate of return. Note: Round your final answer to the nearest whole percent. 3. Compute the project's payback period. Note: Round your answer to 2 decimal place. 4. Compute the project's simple rate of return. Note: Round your final answer to the nearest whole percent.
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