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Reposting because it was answered incorrectly, please show the formulas!! Laurman, Inc. is considering the following project: Required investment in equipment Project life Salvage value
Reposting because it was answered incorrectly, please show the formulas!!
Laurman, Inc. is considering the following project: Required investment in equipment Project life Salvage value The project would provide net operating income each year as follows: Sales Variable expenses Contribution margin Fixed expenses: Salaries, rent and other fixed out-of pocket costs Depreciation Total fixed expenses Net operating income \begin{tabular}{|r|} \hline 2,750,000 \\ 1,600,000 \\ \hline$1,150,000 \\ \hline 870,000 \\ \hline$280,000 \\ \hline \hline \end{tabular} Company discount rate Required: will display in parentheses.) 1. Compute the annual net cash inflow from the project. $630,000 2. Complete the table to compute the net present value of the investment. Use Excel's PV function to compute the present value of the future cash flows $2,401,262.38 $4,606,262.38 3. Use Excel's RATE function to compute the project's internal rate of return 18.00% 4. Compute the project's payback period. 3.1 years 5. Compute the project's simple rate of return. 12.70%Step by Step Solution
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