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1. What are the projects annual net cash inflows? 2. What is the projects payback period? Cardinal Company is considering a project that would require
1. | What are the projects annual net cash inflows? |
2. What is the projects payback period?
Cardinal Company is considering a project that would require a $2,745,000 Investment in equipment with a useful life of five years. At the end of five years, the project would terminate and the equipment would be sold for its salvage value of $500,000. The company's discount rate is 18%. The project would provide net operating Income each year as follows: Sales Varlable expenses $ 2,857000 1,011,000 1,846,000 Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation $ 799,000 449,000 Total fixed expenses 1,248,000 Net operating income $ 598,000Step by Step Solution
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