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: $2,205,000 7 225,000 $2,750,000 1,600,000 $1,150,000 Salaries, rent and other fixed out-of pocket costs Depreciation Total fixed expenses Net operating income. Company discount rate Required: $520,000 350,000 870,000 $280.000 18% (Use cells A4 to C18 from the given information, as well as 824, and A30 to D45 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 investment. $630,000 nitial investment „Annual cost savings Salvage value of the new machine Total cash flows Discount factor Present value of the cash flows 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 Excels RATE function to compute the project's internal rate of return 4. Compute the project's payback period. Year(s) Now (52,205,000.00) 1 through 7 7 $630,000.00 152,205,000.001 $630,000.00 $225,000.00 $225,000.00 L00000 You must use the -PV function in your formula years 2 Laurman, Inc. is considering the following project: 4 Required investment in equipment 5 Project life 6 Salvage value 8 The project would provide net operating income each year as follows: Sales 9 10 Variable expenses 11 Contribution margin 12 Fixed expenses: 13 Salaries, rent and other fixed out-of pocket costs 14 Depreciation 15 Total fixed expenses 16 Net operating income 17 18 Company discount rate اور B с D E $2,205,000 7 225,000 $2,750,000 1,600,000 $1,150,000 $520,000 350,000 870,000 $280.000 18% 20 Required: 21 22 23 (Use cells A4 to C18 from the given information, as well as 824, 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.) 24 1. Compute the annual net cash inflow from the project. 25 26 2. Complete the table to compute the net present value of the investment. 27 28 29 30 Initial investment B1 Annual cost savings 32 Salvage value of the new machine 33 Total cash flows 34 Discount factor 35 Present value of the cash flows 36 Net present value 37 38 Use Excel's PV function to compute the present value of the future cash flows 39 Deduct the cost of the investment 40 Net present value 41 42 3. Use Excels RATE function to compute the project's internal rate of return 43 44 4. Compute the project's payback period. F Year(s) Now 152,205,000.001 1 through 7 7 1.00000 years $225,000.00