Cardinal Company is considering a five-year project that would require a $2,850,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 18%. The project would provide net operating income in each of five years as follows: Sales $ 2,857,000 Variable expenses 1,011,000 Contribution margin 1,846.000 Fixed expenses Advertising, waarins, and other fixed out-of-pocket costs $ 799.000 Depreciation 570.000 Total fixed expenses 1.369,000 Mot operating in $ 477,000 Click here to view Exhibh 123-1 and Exhibit 128-2. to determine the appropriate discount factor(s) using table. Required: 1 Which items in the income statement shown above will not affect cash flows? [You may select more than one answer. Single click the box th the question mark to produce check mark for correct answer and double click the box with the question mark to empty the box for a wrong answer. Any bones left with question mark will be automatically graded as incorrect) verwies and other feet out of occo Deprecatione 2. What are the project's annual net cash inflows? 3. What is the present value of the project's anual net cash nows? Mound your final answer to the nearest whole dollar amount) 4. What is the project's net present value? (Round final answer to the nearest whole dollar amount.) 5. What is the profitability index for this project? (Mound your answer to 2 decimal places) Pretty 6. What is the projects internal rate of return? 7 What is the project's payback period? (Round your answer to 2 decimal places.) ya What is the project's simple rate of return for each of the five yearst Round your answer to 2 decimal places.) 3. If the company's count rate was 20% instead of sex, would you expect the projects net present value to be higher, tower, or the same? Higher Lower Osame 10.of the equipment had a salvage value of $300,000 at the end of five years, would you expect the project's payback period to be higher tower, or the same? Higher Lower o Same Same Lower Higher higher lower, or the same? aq o ano pasado spooud og pedra nok prom Sak ng puwa 2 000 00ES 10 enes a peu umwachina anu 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 project's actual net present value? (Negative amount should be indicated by a minus sign. Round intermediate calculations and final answer to the nearest whole dollar amount.) Net in valum 14. Assume a postaudit showed that allestimates including total sales) were exactly correct except for the variable expense ratio, which actually turned out to be 45%. What was the project's actual payback period (Round your answer to 2 decimal places.) Payback pened 15. Assume a pontnugth showed that all estimates (including total sales were exactly correct except for the variable expense ratio which actually turned out to be 40% What was the projects actual simple rate of retur? Round your answer to 2 decimal places)
