please show the formulas

Excel SIM: Comparison of Capital Budgeting Methods 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. ? 5 X Sign in M Cells Editing S. Comparison of Capital Budgeting Methods - Excel FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW X Calibri 11 -AM 96 Paste BIU - Alignment Number Conditional Format as Cell Formatting Table Styles Clipboard Font Styles A1 > 5. Laurman, Inc. is considering the following project: B c 1 Laurman, Inc. is considering the following project: 2 Required investment in equipment s 2,205,000 3 Project life 7 4 Salvage value 225,000 5 6 The project would provide net operating income each year as follows: 7 Sales $ Variable expenses D E 2,750,000 1.600.000 8 D E 2,205,000 7 225,000 $ B 1 Laurman, Inc. is considering the following project: 2 Required investment in equipment $ 3 Project life 4 Salvage value 5 6 The project would provide net operating income each year as follows: 7 Sales 8 Variable expenses Contribution margin 10 Fixed expenses: 11 Salaries, rent and other fixed out of pocket costs $ Depreciation 13 Total fixed expenses Net operating income 15 16 Company discount rate 18% 2,750,000 1,600,000 1,150,000 9 S $ 520,000 350.000 12 870,000 280.000 14 17 $ 630,000 18 1. Co pute the annual net cash inflow from the project. 19 20 2. Complete the table to compute the net present value of the investment. 21 22 23 Year(s) 1-7 Now 7 Sheet1 READY 100% B c D E 7 225,000.00 225,000.00 0.314 70,633.13 21 22 Year(s) 23 Now 1-7 24 Initial investment $ (2,205,000.00) 25 Annual cost savings $ 630,000.00 26 Salvage value of the new machine $ 27 Total cash flows $ (2.205,000.00) S 630,000.00 $ 28 Discount factor 1.000 3.182 29 Present value of the cash flows $ (2,205,000.00) $ 2,401,262.38 $ 30 Net present value 266,895.52 31 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 38 4. Compute the project's payback period. 39 40 S. Compute the project's simple rate of return. 41 42 43 years + - 44 Sheet1 READY