Complete the capital budgeting methods. All answers must be entered as a formula.

1 Laurman, Inc. is considering the following project: Required investment in equipment 3 Project life 4 Salvage value 1,750,000 5 years 225,000 2,750,000 1,600,000 1,150,000 $ 6 The project would provide net operating income each year as follows: 7 Sales Variable expenses Contribution margin 10 Fixed expenses: Salaries, rent and other fixed out-of pocket costs Depreciation 13 Total fixed expenses 14 Net operating income 520,000 350,000 870,000 280.000 18% 16 Cost of Capital 17 18 1. Compute the annual net cash inflow from the project. 20 2. Complete the following timeline to compute the net present value of the future cash flows for this project. Don't forget to include the salvage value in year 5. Year 22 1.000 23 Net cash flow 24 Discount Factor = 1/((1+r)^n) 25 Present value of the cash flows 26 Net present value 28 3. Use Excel's NPV function to compute the present value of the cash flows from years 1-5. Do not include the original investment at time zero. 29 NPV of Cash Flows from Years 1-5 30 Deduct the cost of the investment 31 Net present value 32 Write an if/then statement to ACCEPT or REJECT the project based on NPV 34 4. Use Excel's IRR function to compute the project's internal rate of return 35 Write an if/then statement to ACCEPT or REJECT the project based on IRR 37 5. Compute the project's payback period. years 39 6. Compute the project's accounting rate of return