Tranter, Inc. is considering a project that would have a ten-year life and would require a $1,200,000 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:

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 net present value.
b. Compute the project's payback period.
c. Compute the project's simple rate ofreturn

Sales Less variable exp Contribution margin Less fixed expenses S1,700,000 1200,000 500,000 Fixed out-of-pocket cash expenses S200,000 .. Depreciation 120.000 320.000 Net operating income