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1. Complete the capital budgeting methods. All answers must be entered as a formula. Click OK to begin. OK ? X KUS. FILE HOME Comparison of Capital Budgeting Methods - Excel REVIEW VIEW INSERT PAGE LAYOUT FORMULAS DATA Sign In AY #1 Calibri - 11 - A EX TI Be - Paste BIU 3 Wrap Text General Merge & Center - $ %, 2898 & Conditional Format as Cell Formatting Table Styles Alignment m Number Styles Insert Delete Format AutoSum- J Fill- Sort & Find & Clear Filter - Select Editing Clipboard Font Cells A1 Laurman, Inc. is considering the following project: F F B D 1 Laurman, Inc. is considering the following project: 2 Required investment in equipment S 1,750,000 3 Project life 5 years 4 Salvage value 225,000 5 6 The project would provide net operating income each year as follows: 7 Sales S 2,750,000 B Variable expenses 1,600,000 9 Contribution margin $ 1,150,000 10 Fixed expenses: 11 Salaries, rent and other fixed out of pocket costs $ 520,000 12 Depreciation 350,000 13 Total fixed expenses 870,000 14 Net operating income S 290.000 15 16 Cost of Capital 18% 17 18 1. Compute the annual net cash inflow from the project. 19 20 2. Complete the following timeline to compute the net present value of the future cash flows for this project. Don't forget to include the salvage value in year 5. 21 Year 22 0 1 2 3 23 Net cash flow S XEA : ? - X Comparison of Capital Budgeting Methods - Excel REVIEW VIEW FILE HOME INSERT PAGE LAYOUT FORMULAS DATA Sign in ES Calibri 11 AR A Ep Wrap Text General DX 47 # Paste BIU > A E Merge & Center $ % Insert Delete Format AutoSum - Fill Sort & Find & Clear Filter - Select Editing Conditional Format as Cell Formatting Table Styles Styles .00 - Clipboard Font Alignment Number Cells A1 foc Laurman, Inc. is considering the following project: B D F G Year 0 1 2 3 4 5 c E 18 1. Compute the annual net cash inflow from the project. 19 20 2. Complete the following timeline to compute the net present value of the future cash flows for this project. Don't forget to include the salvage value in year S. 21 22 2 23 Net cash flow 24 Discount Factor = 1/((1+r)^n) 1.000 25 Present value of the cash flows 25 Net present value 27 28 3. Use Excel's NPV function to compute the present value of the cash flows from years 1-5. Do not include the original investment at time zero. 29 NPV of Cash Flows from Years 1-5 30 Deduct the cost of the investment 31 Net present value 32 Write an if/then statement to ACCEPT or REJECT the project based on NPV 33 34 4. Use Excel's IRR function to compute the project's internal rate of return 35 Write an if/then statement to ACCEPT or REJECT the project based on IRR 36 37 5. Compute the project's payback period. years 38 39 6. Compute the project's accounting rate of return 40 Sheet1 ... + READY 15) + + 100%