Question: Calculating Simple Payback and Net Present Value (20 points) Use the data in the following table to answer the questions that follow. Project Costs and
Calculating Simple Payback and Net Present Value (20 points)
Use the data in the following table to answer the questions that follow.
| Project Costs and Benefits | Cash Flow Amounts |
| Cash Outflow Year 0 | ($875,000) |
| Cash Inflow Year 1 | $200,000 |
| Cash Inflow Year 2 | $300,000 |
| Cash Inflow Year 3 | $375,000 |
| Cash Inflow Year 4 | $325,000 |
Given the investment data in the table above for a given supplier development project calculate and interpret the simple payback and net present value. Assume that this companys hurdle rate is 10% and the payback requirement is a maximum of 2 1/2 years (30 months). Based on your results identify for each analysis whether or not the company should move ahead with the project.
***You must show all work to receive full credit
Simple Payback:
Net Present Value:
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