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Lamar Company is considering a project that would have an eight-year life and require a $2,700,000 investment in equipment. At the end of 7 years,
Lamar Company is considering a project that would have an eight-year life and require a $2,700,000 investment in equipment. At the end of 7 years, the project would terminate and the equipment would have no salvage value. The project would provide net operating income each year as follows: The companys discount rate is 11%. Sales $3,000,000 Variable expenses 1,800,000 Contribution margin.. 1,200,000 Fixed expenses Adverting, salaries, and other fixed out-of-pocket costs $600,000 Depreciation.. 355,000 Total fixed expenses. 955,000 Net Operating Income. $245,000 A. Compute the net annual cash inflow from the project. B. Compute the projects net present value. Is the project acceptable? C. Find the projects internal rate of return to the nearest whole percent. D. Compute the projects payback period. E. Compute the projects simple rate of return
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