Instructions: Lovecraft Inc. is considering three different investment proposals. They will invest cash from their accululated free cash flow and thus, will not need to borrow Lovecraft's hurdle rate for investments is 12% Calculate the payback period, ARR, NPV, and IRR for each of the proposals. Proposal 1: Malaysia call center Cost 10,000,000.00 Estimated useful life 20 years Estimated annual cash flow 1,200,000,00 Estimated annual net income 1,000,000.00 Estimated salvage value 200,000.00 Proposal 2: Mexico maquilladora Cost 10,000,000.00 Estimated useful life 18 years Estimated annual cash flow 1,500,000.00 Estimated annual net income 1,350,000.00 Estimated salvage value 500,000.00 Proposal 3: Acquisition of a competitor's patent Cost 10,000,000.00 Estimated useful life 15 years Estimated annual cash flow 1,600,000.00 Estimated annual net income 1,500,000.00 Estimated salvage value Calculations Calculations 311 Homework 15 Net Present Value Proposal 1: Malaysia call center Cost of Investment Annual Cash flow Number of Periods Hurdle Rate PV of Annual Cash Flow Net Present Value of investment Proposal 2: Mexico maquilladora Cost of investment Annual Cash flow Number of Periods Hurdle Rate PV of Annual Cash Flow Net Present Value of investment Calculations Proposal 3: Acquisition of a competitor's patent Cost of investment Annual Cash flow Number of Periods Hurdle Rate PV of Annual Cash Flow Net Present Value of Investment Calculations Calculations 311 Homework 15 Net Present Value Proposal 1: Malaysia call center Cost of investment Annual Cash flow Number of Periods Hurdle Rate PV Factor IRR from chart IRR usine RATE formula Proposal 2: Mexico maquilladora Cost of investment Annual Cash flow Number of Periods Hurdle Rate PV Factor IRR from chart IRR USING RATE formula Proposal 3: Ac Cost of investment Annual Cash flow Number of Periods Hurdle Rate PV Factor IRR from chart IRR using RATE formu Calculations Calculations Proposal 3: Acquisition of a competitor's patent Cost of Investment Annual Cash flow Number of Periods Hurdle Rate PV Factor IRR from chart IRR using RATE formula