Laurman, Incorporated is considering the following project: Required imvestment in cquipment Praject life Salvage value...
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Laurman, Incorporated is considering the following project: Required imvestment in cquipment Praject life Salvage value The project would provide net operating income cach year as follows: Sales Variable expenses Contribution margin Fixed expenses: Salarics, rent and other fiwed out of pocket costs Depreclation Total fived expenses Net aperating income Company dlscount rate Required: (Use cells A4 to C18 from the given information, as well as B24, and A30 to D46 to complete this question. Negative amounts or amounts to be deducted should be input as negative values and will display in parentheses.) 1. Compute the annual net cash inflow from the project. 2. Complete the table to compute the net present value of the imwestment. Initial investment Annual cost savings Salvage value of the new machine Total cash flaws Discount factor Present volue of the cash flaws Net present value Use Excel's PV function to compute the present value of the future cash flows Deduct the cost of the investment Net present value 3. Use Excel's RATE function to compute the project's internal rate of return 4. Compute the project's payback period. Year(s) Now 1 through 7 7 5. Compute the project's simple rate of return
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