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need formulas. discount factor Laurman, Inc. is considering the following project: Required investment in equipment Project life $7225,0002,205,000 Salvage value The project would provide net
need formulas. discount factor
Laurman, Inc. is considering the following project: Required investment in equipment Project life $7225,0002,205,000 Salvage value The project would provide net operating income each year as follows: Sales Variable expenses Contribution margin \begin{tabular}{ll} $ & 2,750,000 \\ & 1,600,000 \\ \hline$ & 1,150,000 \end{tabular} Fixed expenses: Salaries, rent and other fixed out-of pocket costs \begin{tabular}{ll} $ & 520,000 \\ & 350,000 \\ \hline \end{tabular} Depreciation Total fixed expenses Net operating income \begin{tabular}{rr} 870,000 \\ \hline 5 & 280,000 \\ \hline \end{tabular} Company discount rate 18% 1. Compute the annual net cash inflow from the project. $630,000 2. Complete the table to compute the net present value of the investmentStep by Step Solution
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