Ursus, Incorporated, is considering a project that would have a ten-year life and would require a $4,500,000 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		$ 2,900,000
Variable expenses		1,800,000
Contribution margin		1,100,000
Fixed expenses:
Fixed out-of-pocket cash expenses	$ 350,000
Depreciation	450,000	800,000
Net operating income		$ 300,000

All of the above items, except for depreciation, represent cash flows. The company's required rate of return is 10%.

\begin{tabular}{|c|c|} \hline a. Net present value & \\ \hline b. Internal rate of return & % \\ \hline c. Payback period & years \\ \hline d. Simple rate of return & % \\ \hline \end{tabular}