Coach Industries is considering a new investment project. The project will cost $100,000 and it will last 5 years. The project will have a salvage value of $10,000 at the end of its 5-year life. During the life of the project, it will have the following cash inflows - cash outflows (assume at year-end):

Yr1 20,000

Yr 2 30,000

Yr 3 40,000

Yr 4 35,000

Yr 5 25,000

1. What is the accounting rate of return? (hint: don't forget depreciation) (round to the nearest .1% and show answers as decimals so 9.5% = .095

2. What is the payback period?

3. If Coach has a required rate of return of 10%, what is the NPV? Round to the nearest $1 (hint: don't forget the salvage value)

4. What is the IRR? (round to the nearest .1%, and remember to show as a decimal so 11.1% = .111

5. You want to be a millionaire by the age of 55. You want to start saving at age 25 (so you will make 30 annual deposits, assuming at the end of the year). If you can earn 8% interest, how much will you need to save each year to reach the goal of $1 Million if you start with $0 at the time you begin saving. Be sure to use Excel to make this easy. Round the annual deposit to the nearest $1.