1. What is the present value of the projects annual net cash inflows?

2. What is the projects internal rate of return?

3. What is the projects payback period?

4, What is the projects simple rate of return for each of the five years?

5. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio, which actually turned out to be 50%. What was the projects actual net present value?

6. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio, which actually turned out to be 50%. What was the projects actual simple rate of return?

Cardinal Company is considering a five-year project that would require a $2,500,000 investment in equipment witha useful life of five years and no salvage value. The company's discount rate is 12%. The project would provide net operating income in each of five years as follows Sales Variable expenses Contribution margin Pixed expenses: $2,853,000 1,200,000 1,653, 000 Advertising, salaries, and other fixed out-of-pocket costs Depreciation $790,000 500,000 Total fixed expenses Net operating income 1,290,000 $ 363,000