? Comparison of Capital Budgeting Methods - Excel PAGE LAYOUT FORMULAS DATA REVIEW FILE HOME INSERT VIEW Sign In fx Calculate Now Function Defined Library Names Formula Auditing Calculation i Calculate Sheet Options Calculation B30 fo =NPV NPV c D E 18% 16 Company discount rate 17 18 1. Compute the annual net cash inflow from the project. $ 630,000 19 Year(s) 7 20 2. Complete the table to compute the net present value of the investment. 21 22 23 Now 1-7 24 Initial investment $ (2,205,000.00) 25 Annual cost savings $ 630,000.00 26 Salvage value of the new machine $ 27 Total cash flows $ (2,205,000.00) $ 630,000.00 $ 28 Discount factor 1.000 3.182 29 Present value of the cash flows $ (2,205,000.00 $ 2,401,262.38 $ 30 Net present value =NPV 31 32 Use Excel's PV function to compute the present value of the future cash flows 33 Deduct the cost of the investment 34 Net present value 35 36 3. Use Excel's RATE function to compute the project's internal rate of return 37 38 4. Compute the project's payback period. 225,000.00 225,000.00 0.314 70,633.13 years