Question
5. What is the project profitability index for this project? (Round your answer to 2 decimal places.) 6. What is the projects internal rate of
5. What is the project profitability index for this project? (Round your answer to 2 decimal places.)
6. What is the projects internal rate of return? (Round your answer to nearest whole percent.)
8. What is the projects simple rate of return for each of the five years? (Round your answer to 2 decimal places.)
13. 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 45%. What was the projects actual net present value? (Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, intermediate calculations and final answer to the nearest whole dollar amount.)
14. 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 45%. What was the projects actual payback period? (Round your answer to 2 decimal places.)
15. 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 45%. What was the projects actual simple rate of return? (Round your answer to 2 decimal places.)
Required information The following information applies to the questions displayed below. Cardinal Company is considering a five-year project that would require a $2,812,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 16%. The project would provide net operating income in each of five years as follows: Sales Variable expenses Contribution margin Fixed expenses: $2,855,000 1,010,000 1,845, 000 Advertising, salaries, and other 798,000 562,400 fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income 1,360,400 $ 484,600 Click here to view Exhibit 128-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table. Required information The following information applies to the questions displayed below. Cardinal Company is considering a five-year project that would require a $2,812,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 16%. The project would provide net operating income in each of five years as follows: Sales Variable expenses Contribution margin Fixed expenses: $2,855,000 1,010,000 1,845, 000 Advertising, salaries, and other 798,000 562,400 fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income 1,360,400 $ 484,600 Click here to view Exhibit 128-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tableStep by Step Solution
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