2. Complete the table to compute the net present value of the investment. Initial investment Annual cost savings 2 Salvage value of the new machine 3 Total cash flows 4 Discount factor 5 Present value of the cash flows 6 Net present value 87 38 Use Excel's PV function to compute the present value of the future cash flows 39 Deduct the cost of the investment Year(s) Now 1 through 7 7 ($2,205,000.00) $630,000.00 $225,000.00 ($2,205,000.00) $630,000.00 $225,000.00 1.00000 40 Net present value 41 42 3. Use Excel's RATE function to compute the project's internal rate of return 43 44 4. Compute the project's payback period. 3.5 years 45 46 5. Compute the project's simple rate of return. 47 48 12.70%