Laurman, Inc. is considering the following project: Required investment in equipment Project life Salvage value The project would provide net operating income each year as follows: Sales Variable expenses Contribution margin Fixed expenses: Salaries, rent and other fixed out-of pocket costs Depreciation Total fixed expenses Net operating income Company discount rate Required: $2,205,000 7 225,000 $520,000 350,000 18% $2,750,000 1,600,000 $1,150,000 870,000 $280,000 1. Compute the annual net cash inflow from the project. 2. Complete the table to compute the net present value of the investment. Initial investment Annual cost savings Salvage value of the new machine Total cash flows Discount factor Present value of the cash flows Net present value Use Excel's PV function to compute the present value of the future cash flows Deduct the cost of the investment Net present value 3. Use Excel's RATE function to compute the project's internal rate of return 4. Compute the project's payback period. Now 1.00000 1 through 7 years Year(s) 7