NEED HELP ASAP PLEASE!! THANK YOU!! Ursus, Incorporated, is considering a project that would have a eleven-year life and would require a $1,848,000 investment in
NEED HELP ASAP PLEASE!! THANK YOU!!
Ursus, Incorporated, is considering a project that would have a eleven-year life and would require a $1,848,000 investment in equipment. At the end of eleven years, the project would terminate and the equipment would have no salvage value. The project would provide net operating income each year as follows (Ignore income taxes.):
Sales $ 2,100,000
Variable expenses 1,400,000
Contribution margin 700,000
Fixed expenses: Fixed out-of-pocket cash expenses $ 370,000, Depreciation 168,000538,000, Net operating income $ 162,000
Click here to view Exhibit 14B-1 (https://ezt.prod.mheducation.com/Media/Connect_Production/bne/accounting/garrison_17e/Exhibit/Exhibit_14B_1.jpg) and Exhibit 14B-2 (https://ezt.prod.mheducation.com/Media/Connect_Production/bne/accounting/garrison_17e/Exhibit/Exhibit_14B_2.jpg), to determine the appropriate discount factor(s) using the tables provided.
All of the above items, except for depreciation, represent cash flows. The company's required rate of return is 9%.
Required:
a. Compute the project's net present value. (Round your intermediate calculations and final answer to the nearest whole dollar amount.)
b. Compute the project's internal rate of return. (Round your final answer to the nearest whole percent.)
c. Compute the project's payback period. (Round your answer to 2 decimal place.)
d. Compute the project's simple rate of return. (Round your final answer to the nearest
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