Ursus, Incorporated, Is Considering a Project That Would Have a Eight-Year

question 319

Essay

Ursus, Incorporated, is considering a project that would have a eight-year life and would require a $2,904,000 investment in equipment. At the end of eight 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.):
Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided.All of the above items, except for depreciation, represent cash flows. The company's required rate of return is 11%.Required:a. Compute the project's net present value. (Round your intermediate calculations and final answer to the nearest whole dollar amount.)
b. Compute the project's internal rate of return. (Round your final answer to the nearest whole percent.)
c. Compute the project's payback period. (Round your answer to 2 decimal place.)
d. Compute the project's simple rate of return. (Round your final answer to the nearest whole percent.)

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Definitions:

Fear Of Success

Belief that if one succeeds at an important task, one will be asked to take on more responsibility in the future

Procrastinate

The action of delaying or postponing tasks, often leading to stress, anxiety, and reduced productivity.

Unwanted Responsibilities

Tasks or duties that are assigned or expected of an individual but are not desired or welcomed by them.

Minimize Procrastination

Refers to strategies and techniques employed to reduce the tendency to delay tasks that need to be accomplished.