5. (4 points) Ursus, Inc., is considering a project that would have a ten-year life and would require a $1,000,000 investment in equipment. At the end of ten years, the project would terminate and the equipment would have no salvage value. The project would provide net operating income each year as follows (Ignore income taxes.): $2,000,000 1,400,000 600,000 Sales Variable expenses Contribution margin Fixed expenses: Fixed out-of-pocket cash expenses $300,000 Depreciation 100,000 Net operating income 400,000 $ 200,000 All of the above items, except for depreciation, represent cash flows. The company's required rate of return is 12%. Required: a. Compute the project's payback period. b. Compute the project's simple rate of return