Question 1 XY company is considering to invest in a new project that a five year life and requires investment in a new motor van worth $2800,000. After 5 years the project would end and there will be no salvage value on the motor van. The project would provide net operating income each year as follows: Sales Variable Expenses Contribution Margin 4,200,000 2,000,000 22,00,000 Fixed Expenses: Fixed out of pocket costs 8,00,000 Depreciation 4,00,000 Total Fixed Expenses Net operating income 12,00,000 10,00,000 Page 1 of 2 The company's discount rate is 12%. The discounting factors at 12% is provided below in the table: 0 1 2 3 4 5 1.000 0.893 0.797 0.712 0.636 0.567 Requirements: 1. Compute the Annual Net Cash Inflow from the project. 2. Compute the project's Net Present Value. Is the project acceptable? 3. Find the project's factor for Internal Rate of Return. 4. Compute the Project's Payback Period. 5. Compute the Project's Simple Rate of Return. [Marks: 5*4=20]