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:

Sales $ $2,746,000$

Variable expenses $1,126,000$

Contribution margin $1,620,000$

Fixed expenses:

Advertising, salaries, and other fixed out$-$of$-$pocket costs $ $615,000$

Depreciation $583,000$

Total fixed expenses $1,198,000$

Net operating income $ $422,000$

Click here to view Exhibit $12$B$-1$ and Exhibit $12$B$-2,$ to determine the appropriate discount factor$($s$)$ using table.

Foundational $12-6($Algo$)$

$6.$ What is the project$$s internal rate of return?

$7.$ What is the project$$s simple rate of return for each of the five years?