Lamar Company is considering a project that would have an eight-year life and require a $2,400,000...

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Lamar Company is considering a project that would have an eight-year life and require a $2,400,000 investment in equipment. At the end of eight years, the project would terminate and the equipment would have no salvage value. The project would provide net operating incon year as follows: Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation.. Total fixed expenses. Net operating income... $700,000 300,000 $3,000,000 1,800,000 1,200,000 1,000,000 $ 200,000 The company's discount rate is 12%. Required: 1. Compute the annual net cash inflow from the project. 2. Compute the project's net present value. Is the project acceptable? 3. Find the project's internal rate of return to the nearest whole percent. 4. Compute the project's payback period. 5. Compute the project's simple rate of return. Lamar Company is considering a project that would have an eight-year life and require a $2,400,000 investment in equipment. At the end of eight years, the project would terminate and the equipment would have no salvage value. The project would provide net operating incon year as follows: Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation.. Total fixed expenses. Net operating income... $700,000 300,000 $3,000,000 1,800,000 1,200,000 1,000,000 $ 200,000 The company's discount rate is 12%. Required: 1. Compute the annual net cash inflow from the project. 2. Compute the project's net present value. Is the project acceptable? 3. Find the project's internal rate of return to the nearest whole percent. 4. Compute the project's payback period. 5. Compute the project's simple rate of return.

Answer rating: 100% (QA)

1 Annual Net Cash Inflow Contribution margin per year 3000000 1200000 1800000 Annual net cash inflow ... View the full answer