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Ursus, Incorporated, is considering a project that would have a ten-year life and would require a $2,145,000 investment in equipmer At the end of ten

Ursus, Incorporated, is considering a project that would have a ten-year life and would require a $2,145,000 investment in equipmer At the end of ten years, the project would terminate and the equipment would have no salvage value. The project would provide ne operating income each year as follows (Ignore income taxes.): Sales Variable expenses Contribution margin Fixed expenses: Fixed out-of-pocket cash expenses a. Net present value b. Internal rate of return c. Payback period d. Simple rate of return Depreciation Net operating income Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. All of the above items, except for depreciation, represent cash flows. The company's required rate of return is 10%. Required: a. Compute the project's net present value. (Round your intermediate calculations and final answer to the nearest whole dolla amount.) b. Compute the project's internal rate of return. (Round your final answer to the nearest whole percent.) c. Compute the project's payback period. (Round your answer to 2 decimal place.) d. Compute the project's simple rate of return. (Round your final answer to the nearest whole percent.) % $360,000 214,500 years % $ 2,200,000 1,450,000 750,000 574,500 $ 175,500
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Ursus, Incorporated, is considering a project that would have a ten-year life and would require a $2,145,000 investment in equipmer At the end of ten years, the project would terminate and the equipment would have no salvage value. The project would provide ne operating income each year as follows (Ignore income taxes): Sales Variable expensee Contribution margin Fixed expenses: Fixed out-of-pocket cash expenses Depreciation Net operating incone $2,200,0001,450,000750,000 Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. All of the above items, except for depreciation, represent cash flows. The company's required rate of return is 10%. Required: a. Compute the project's net present value. (Round your intermediate calculations and final answer to the nearest whole dolla amount.) b. Compute the project's internal rate of return. (Round your final answer to the nearest whole percent.) c. Compute the project's payback period. (Round your answer to 2 decimal place.) d. Compute the project's simple rate of return. (Round your final answer to the nearest whole percent.)

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