please add formulas
16 eBook 1. Determine the payback period for an investment. 2. Evaluate the acceptability of an investment project using the net present value method. 3. Evaluate the acceptability of an investment project using the internal rate of return method. 4. Compute the simple rate of return for an investment. X 8 FILE Paste A1 8 P Clipboard G 8 9 10 11 12 . - HOME Calibri 3 Project life 4 Salvage value 5 INSERT BIU- 11 B Font Depreciation 13 Total fixed expenses 14 Net operating income 15 16 Company discount rate 17 PAGE LAYOUT By X A A Comparison of Capital Budgeting Methods - Excel FORMULAS DATA REVIEW A B Laurman, Inc. is considering the following project: 2 Required investment in equipment T % Alignment Number Conditional Format as Cell Formatting Table Styles Styles fx Laurman, Inc. is considering the following project: 6 The project would provide net operating income each year as follows: 7 Sales Variable expenses Contribution margin Fixed expenses: Salaries, rent and other fixed out-of pocket costs $ 18% $ 2,205,000 7 225,000 VIEW 520,000 350,000 $ $ $ Cells D ? A Editing 2,750,000 1,600,000 1,150,000 870,000 280,000 9 Sign In E X 16 eBook Clipboard G A38 16 Company discount rate 17 I Font 30 Net present value 31 X 18 1. Compute the annual net cash inflow from the project. 19 26 Salvage value of the new machine 27 Total cash flows 28 Discount factor 29 Present value of the cash flows READY Formatting lable Styles Styles foc 4. Compute the project's payback period. 20 2. Complete the table to compute the net present value of the investment. 21 22 23 24 Initial investment 25 Annual cost savings B 38 4. Compute the project's payback period. 20 Sheet1 (+ 18% Now 1.000 32 Use Excel's PV function to compute the present value of the future cash flows 33 Deduct the cost of the investment 34 Net present value 35 36 3. Use Excel's RATE function to compute the project's internal rate of return 37 Year(s) 1-7 4 8:88 A | D 7 years E 100% 16 eBook Clipboard A44 30 Net present value 31 22 23 24 Initial investment 25 Annual cost savings 26 Salvage value of the new machine 27 Total cash flows 28 Discount factor 29 Present value of the cash flows 34 Net present value 35 I A Font 4 38 4. Compute the project's payback period. 39 READY Attempt(s) 40 5. Compute the project's simple rate of return. 41 42 43 44 32 Use Excel's PV function to compute the present value of the future cash flows 33 Deduct the cost of the investment B Sheet1 Now 36 3. Use Excel's RATE function to compute the project's internal rate of return 37 1.000 Formatting Table Styles Styles Year(s) 1-7 4 D 7 years Hint E + 100% Show Me
