Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3 Required information [The following information applies to the questions displayed below) Cardinal Company is considering a five-year project that would require a $2,500,000 investment

image text in transcribed
image text in transcribed
image text in transcribed
3 Required information [The following information applies to the questions displayed below) Cardinal Company is considering a five-year project that would require a $2,500,000 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: Part 1 of 3 15 points Sales $ 2,853,000 Variable expenses 1.200,000 Contribution margin 1,653,000 Fixed expenses Advertising, salaries, and other fixed out-of-pocket costs $ 790,000 Depreciation 500,000 Total fixed expenses 1.200.000 Net operating Income 5 363,000 Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using table 8 02:00:35 4. What is the project's net present value? (Round final answer to the nearest whole dollar amount.) Net present value Saved Submit 4. Help Save & Exit Required information [The following information applies to the questions displayed below) Cardinal Company is considering a five-year project that would require a $2,500,000 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: Part 2 of 3 $ 2,853,000 1.200,000 1,653,000 1 points Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income $ 790,000 500.000 8 02.00:03 1,290,000 $363.000 Click here to view Exhibit 14B-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using table 5. What is the profitability index for this project? (Round your answer to 2 decimal places.) Profitability index 5 Required information [The following information applies to the questions displayed below) Cardinal Company is considering a five-year project that would require a $2,500,000 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: Part 3 of 3 1 points Sales $ 2,653,000 Variable expenses 1.200.000 Contribution margin 1,653,000 Fixed expenses Advertising, salaries, and other fixed out-of-pocket costs $ 790,000 Depreciation 500.000 Total fixed expenses 1.200.000 Net operating income 5 363,000 Click here to view Exhibit 148-1 and Exhibit 14B-2. to determine the appropriate discount factor(s) using table 8 01:59:42 6. What is the project's internal rate of return? 9 Project's internal rate of return

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting The Impact On Decision Makers An Alternative To Debits And Credits

Authors: Gary A. Porter, Curtis L. Norton

3rd Edition

0030335639, 978-0030335631

More Books

Students also viewed these Accounting questions