Reference no: EM132633141 
                                                                               
                                       
Learner company is considering a project that would have an eight-year life and require a 2,400,000 investment in equipment. At the end of 8 years, the project would terminate and the equipment would have no salvage value.
The project would provide net operating income each year as follows:
Sales						3,000,000
Variable expenses				1,800,000
Contribution margin				1,200,000
Fixed expenses:
Advertising, salaries & other out of
Pocket costs		700,000
Depreciation			300,000 1,000,000
Net Operating Income				 200,000
The company's discount rate is 12%.
Problem 1: Compute for the following:
a.	 Annual net cash inflow
b.	NPV
c.	Payback Period
d.	ARR