Cardinal Company is considering a five year project that would require a $2,975,000 investment in equipment with a useful life of five years and no salvage value The companys discount rate is 14 The project would provide net operating income in each of five years as follows Sales $2,735,000 Variable expenses 1,000,000 Contribution margin 1,735,000 Fixed expenses Advertising, salaries, and other fixed out of pocket costs $735,000 Depreciation 595,000 Total fixed expenses 1,330,000 Net operating income $405,000 What is the projects simple rate of return for each of the five years If the companys discount rate was 16 instead of 14 , would you expect the projects net present value to be higher than, lower than, or the same as your answer to requirement 4 No computations are necessary If the equipment had a salvage value of $300,000 at the end of five years, would you expect the projects payback period to be higher than, lower than, or the same as your answer to requirement 7 No computations are necessary If the equipment had a salvage value of $300,000 at the end of five years, would you expect the projects net present value to be higher than, lower than, or the same as your answer to requirement 3 No computations are necessary If the equipment had a salvage value of $300,000 at the end of five years, would you expect the projects simple rate of return to be higher than, lower than, or the same as your answer to requirement 8 No computations are necessary 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 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 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

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Cardinal Company is considering a five-year project that would require a $2,975,000 investment in equipment with a useful life of five years and no salvage

Cardinal Company is considering a five-year project that would require a $2,975,000 investment in equipment with a useful life of five years and no salvage value. The companys discount rate is 14%. The project would provide net operating income in each of five years as follows:

Sales $2,735,000

Variable expenses 1,000,000

Contribution margin 1,735,000

Fixed expenses:

Advertising, salaries, and other fixed out-of-pocket costs $735,000

Depreciation 595,000

Total fixed expenses 1,330,000

Net operating income $405,000

What is the projects simple rate of return for each of the five years?
If the companys discount rate was 16% instead of 14%, would you expect the projects net present value to be higher than, lower than, or the same as your answer to requirement 4? No computations are necessary.
If the equipment had a salvage value of $300,000 at the end of five years, would you expect the projects payback period to be higher than, lower than, or the same as your answer to requirement 7? No computations are necessary.
If the equipment had a salvage value of $300,000 at the end of five years, would you expect the projects net present value to be higher than, lower than, or the same as your answer to requirement 3? No computations are necessary.
If the equipment had a salvage value of $300,000 at the end of five years, would you expect the projects simple rate of return to be higher than, lower than, or the same as your answer to requirement 8? No computations are necessary.
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?
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?
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?