1. Which item(s) in the income statement shown above will not affect cash flows?

Sales, Variable expenses , Advertising, Depreciation expense

2. What are the projects annual net cash inflows?

3. What is the present value of the projects annual net cash inflows? (Round your final answer to the nearest whole dollar amount.)

4. What is the projects net present value? (Round discount factor(s) to 3 decimal places and final answer to the nearest whole dollar amount.)

5. What is the project profitability index for this project? (Round your answer to 2 decimal places.)

Cardinal Company is considering a five-year project that would require a $2,915,000 investment in equipment with a 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: $2,746,000 1,126,000 1,620,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income $ 615,000 583,000 1,198,000 $ 422,000