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Please prepare Hunter, Inc., is considering a project that would have a seven-year life and would require a $1,600,000 investment in equipment. At the end

Please prepare Hunter, Inc., is considering a project that would have a seven-year life and would require a $1,600,000 investment in equipment. At the end of seven years, the project would terminate and the equipment would have no salvage value. The project would provide net operating income each year as follows:

Sales

$850,000

Variable Expenses

450,000

Contribution Margin

400,000

Fixed Expenses:

Fixed out-of-pocket cash expenses

50,000

Depreciation

130,000

180,000

Net Operating Income

$220,000

All of the above items, except for depreciation, represent cash flows. The company's required rate of return is 8%. Required: a. Compute the project's net present value. b. Compute the project's internal rate of return to the nearest whole percent. c. Compute the project's payback period.

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