Tranter, Inc., is considering a project that would have a ten-year life and would require a $2,668,000 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.)

Sales			$	2,400,000
Variable expenses				1,550,000
Contribution margin				850,000
Fixed expenses:
Fixed out-of-pocket cash expenses	$	270,000
Depreciation		200,000		470,000
Net operating income			$	380,000

Click here to view Exhibit 13B-2, to determine the appropriate discount factor(s) using tables.

All of the above items, except for depreciation, represent cash flows. The company's required rate of return is 14%.

a.

Compute the project's net present value

b.

Compute the project's internal rate of return to the nearest whole percent.

c.

Compute the project's payback period.

d.	Compute the project's simple rate of return