Laurman, Incorporated is considering the following project: Required investment in equipment Project life Salvage value $ 17,50,000 5 years 2,25,000 The project would provide net operating income each year as follows: Sales Variable expenses $ 27,50,000 16,00,000 5 11,50,000 Contribution margin Fixed expenses ok Salaries, rent and other fixed out-of pocket con cont Depreciation $ 5,20,000 3,50,000 Total fixed expenses Net operating income nces Cost of Capital 18% Required: ,70,000 $ 2,00,000 1. Compute the annual net cash inflow from the project. 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. 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. 4. Use Excel's IRR function to compute the project's internal rate of return. 5. Compute the project's payback period. 6. Compute the project's accounting rate of return. T A 2 Laurman, Incorporated is considering the following project: 3 A Required investment in equipment 5 Project life 6 Salvage value 7 8 The project would provide net operating income each year as follows: $ 1,750,000 5 years 225,000 + 9 10 Sales $ 2,750,000 11 Variable expenses 1,600,000 12 Contribution margin $ 1,150,000 13 Fixed expenses 14 Salaries, rent and other fixed out-of pocket costs $ 520,000 15 Depreciation 350,000 16 Total fixed expenses 17 Net operating income S 870,000 280,000 18 19 Cost of Capital 18% 20 21 Required: 22 Note: Use cell A2 to A19 from the given information to complete this question. 23 24 1. Compute the annual net cash inflow from the project. 25 630,000 D E 26 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 27