(Ignore income taxes in this problem.)Ursus,Inc.,is considering a project that would have a ten-year life and would require a $1,000,000 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 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.
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