Harrison Corporation is studying a project that would have an eight-year life and would require a $600,000 investment in equipment which has no salvage value. The project would provide net operating income each year as follows for the life of the project:

Sales: $500,000

Less cash var. expenses: (200,000)

Contribution Margin: 300,000

Less Fixed Expenses:

Fixed Cash Expense:(150,000)

Depreciation Expense:(37,500)

Net Operating Income: 112,500

The company's required rate of return is 10%.

1. Compute the project's net present value. Should management ACCEPT or REJECT the project?

2. Compute the project's internal rate of return to the nearest whole percent.

3. If Harrison Companys minimum acceptable payback period is 3 years, should management ACCEPT or REJECT the project?

4. Compute the project's simple rate of return.