Cardinal Company is considering a five-year project that would require a $2,855,000 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		$ 2,867,000
Variable expenses		1,125,000
Contribution margin		1,742,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs	$ 706,000
Depreciation	571,000
Total fixed expenses		1,277,000
Net operating income		$ 465,000

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 50%. What was the projects 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.)

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 50%. 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 50%. What was the projects actual simple rate of return? (Round your answer to 2 decimal places.)

EXHIBIT12B-2 Present Value of an Annuity of $1 in Arrears: 1/1(1-(1/(1+r)^n)) 0.893 2.775 2.723 Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 1 1 0.962 0.952 0.943 0.935 0.926 0,917 0.909 0.909 0.901 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.820 0.813 0.806 0.800 2 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.713 1.690 1.668 1.647 1.626 1.605 1.585 1.566 1.547 1.528 1.509 1.492 1.474 1.457 1.440 3 2.673 2.624 2.577 2.531 2.487 2.444 2.402 2.361 2.322 2.283 2.246 2.210 | 2.174 2.140 2.106 2,074 2.042 2.011 1.981 1.952 4 2.car 3.630 3.546 3.465 3.387 3.312 3.240 3.170 109 3.102 3.037 2017 2.974 2.914 2055 2.855 2200 2.798 2.743 2.600 2.690 2020 500 SA 2.589 2.639 2.540 2.494 20 24 2.404 | 2.362 2.448 45 5 4270 A 4.452 4.329 219 4.212 20 co 4.100 3.993 2701 3.791 cos 3.890 3.696 3.605 2203 non 3.517 2222 3.433 3.352 3.199 3.274 200 3.058 3.127 2.991 2.926 ca 2.864 2.803 24 con 6 2.745 2.689 101 507 20 5.242 5.076 40 692 AC 4.917 4.767 2000 4.623 4.231 4.4864.355 4.111 3.889 2 con 3.998 24 3.589 3.784 3.685 2410 3.410 3.498 3.326 2009 ed 2006 3.245 an 3.167 3.092 3.020 2.951 7 6.002 02 nem 09 5.786 5.582 5.389 5.206 5.033 4.868 4.712 4000 4.423 20 4.564 22 4.039 4.160 4.288 3.922 3.706 e 3.812 3.605 ed 3.508 3.416 2012 3.327 8 3.2423.161 6.733 6.210 6.463 5.971 5.747 see aer 5.535 5.335 4.968 5.146 4.799 2006 4.639 4.487 4.344 4.207 3.954 3.837 4100 3.726 4.078 3.421 2002 an 3.619 an 3.518 *** 9 7.435 3.329 100 6.802 and 6.515 7.108 20 6.247 2012 200 5.995 5.759 5.537 5.3285.132 4.946 4.772 4.607 4.451 4.303 4.163 4.031 3.905 3.786 face 3.673 3.463 10 3.566 2400 and 11 e 8.111 7.722 6.710 7.360 7.024 6.418 6.145 5.889 5.650 5.426 400 one mer 5.216 ane 5.019 4.833 4.659 res 4.494 2200 4.339 4.192 4.054 3.799 2000 3.923 een 11 3.682 3.571 8.7630 8.306 7.887 7.499 7.139 02 6.495 5.938 6.207 22 6.805 5.687 400 CEC 4 5.453 5.029 5.234 4.836 4.656 00 4.486 402 4.327 4.177 20 ca 3.902 4.035 3.776 12 rad 3.656 co 9.385 8.863 8.384 7.943 7.536 sou ce 1000 7.161 6.814 6.492 6.194 5.918 5.660 100 200 5.421 5.197 4.988 4.793 4.611 4.439 4.278 , -, 3.985 4.127 201 3.851 | 3.725 13 9.986 9.394 8.853 8.358 and 7.904 7.487 20 7.103 6.750 6.424 6.122 5.842 760 5.583 5.342 5.118 4.533 mo 4.910 4.715 an 4.362 ca 4.203 Tavare 4.053 14 3.912 3.780 9.295 10.563 9.899 8.745 8.244 dir 7.786 6.982 Niwe 7.367 6.628 6.302 6.002 20a 5.724 5.468 5.229 an Video 5.008 4.802 4.611 4.432 4.265 4.108 3.962 3.824 15 11.118 10.380 9.712 9.108 The 8.559 8,061 7.606 7.191 ave 6.811 6.462 | 6.142 5.847 5.575 5.324 5.092 4.876 4.675 4.489 *** 4.315 4.153 4.001 4 3.859 ed 16 en an * 11.652 10.838 10.106 9.447 * 8.851 ***** 8.313 7.824 7.379 Leer 6.974 Iw end 6.604 6.265 5.954 5.668 5.405 5.1624.938 4.730 4.536 4.357 4.189 4.033 3.887 400 17 12.166 11.274 10.477 9.763 9.122 8.544 8.0227.549 7.120 6.729 6.373 6.047 5.749 5.475 1000 no 100 4.990 5.222 17 4.775 *** 4.576 4.391 4.059 4.219 3.910 20 18 med 12.65911.690 10.828 10.059 9.372 10 20 8.756 8.201 100 7.702 7.250 6.840 6.467 . 6.128 5.818 5.534 5.273 5.033 4.812 4.608 Choo 4.419 ***** 4.243 4.080 19 3.928 13.134 12.085 | 11.158 10.336 9.604 1 8.950 8.365 7.839 7.366 6.938 6.550 6.198 5.877 . 5.584 5.316 5.070 4.843 4.635 4.442 4.263 4.097 3.942 20 13.590 12.462 | 11.470 10.594 9.818 9.129 8.514 7.963 7.469 7.025 6.623 6.259 5.929 5.628 5.353 5.101 4.870 4.657 4.460 4.279 4.110 3.954 21 21 14.029 12.821 | 11.764 10.836 10.017 | 9.292 ve TV Vio NU 8.649 8.075 7.562 7.102 6.687 6.312 5.973 5.665 5.384 4.891 4.675 5.127 re 4.292 4.121 2010 4.476 Thur 22 3.963 Tale 14.451 13.163 12.042 11.061 10.201 | 9.442 2010 7.645 8.7728.176 77 7.170 6.743 6.359 6.011 5.696 ry 5.149 5.410 4.909 2 Ava 4.690 4.488 4.302 4.130 3.970 They 23 14.857 13.489 12.303 11.272 10.371 | 9.580 Thay 8.883 8.266 7.718 7.230 6.792 6.399 6.044 | 5.723 5.432 5.167 4.925 4.703 4.499 4.311 4.137 3.976 24 15.247 | 13.799 12.550 | 11.469 10.529 | 9.707 8.985 8.348 7.784 7.283 6.835 6.434 6,073 5.746 5.451 5.182 4.937 4.713 4.507 4.318 4.143 3.981 25 15.622 14.094 12.783 11.654 10.675 9.823 9.077 8.422 7.843 7.330 6.872 6.464 6.097 5.766 5.467 5.195 4.948 4.721 4.514 4.323 4.147 3.985 26 15.983 14.375 13.003 11.826 10.810 9.929 9.929 9.161 8.488 7.896 7.372 6.906 6.491 6.118 5.783 5.480 5.206 4.956 4.728 4.520 4.328 4.151 3.988 27 16.330 14.643 13.211 | 11.987 10.935 10.027 9.237 8.548 7.943 7.409 6.935 6.514 6.136 5.798 5.492 5.215 4.964 4.734 4.524 4.332 4.154 28 16.663 14.898 13.406 12.137 11.051 | 10.116 | 9.307 8.602 7.984 7.441 6.961 6.534 6.152 5.810 5.810 5.502 5.223 4.970 4.739 4.528 4.335 4.157 3.992 3992 29 16.984 15.141 13.591 12.278 11.158 10.198 9.370 8.650 8.022 7.470 6.983 6.551 6.166 5.820 5.510 5.229 4.975 4.743 4.531 4.337 4.159 3.994 30 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.694 8.055 7.496 7.003 6.566 6.177 5.829 5.517 5.235 4.979 4.746 4.534 4.339 4.160 3.995 40 19.793 17.159 15.046 13.332 11.925 10.757 9.779 8.951 8.244 7.634 7.105 6.642 6.233 5.871 5.548 5.258 4.997 4.760 4.544 4.347 4.166 | 3.999 4.154 3.990 XHIBIT 12B-1 resent Value of $1;1(1+1) n 11% 23% 24% 0.820 0.813 0.907 0.706 0.794 0.772 Periods 1 2 2 3 4 5 6 7 8 9 10 11 12 13 12 14 15 16 19 17 10 18 19 20 5% 6% 7% 8% 9% 10% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 25% 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.806 0.800 0.925 0.890 0.873 0.857 0.842 0.826 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.718 0.694 0.683 0.672 0.650 0.661 0.640 0.889 0.864 0.840 0.816 0.751 0.731 0.712 0.693 0.675 0.058 0.641 0.624 0.609 0.393 0 593 0.579 0.564 0.551 0.537 0.524 0.512 0.855 0.823 0.792 0763 0.703 0.735 0.708 0.683 0.659 0.636 0.613 0.592 0.572 0.552 0.534 0.516 0.499 0.482 0.467 0.451 0.437 0.423 0410 0.822 0.784 0.713 0.747 0.410 0.681 0.650 0.621 0.5930.567 0.543 0107 0.519 0.497 AC 0.476 0.456 2 0.437 0.419 1.43 0.402 0.386 0.370 0.355 0241 0.341 0.328 0.790 0.746 0.705 0.666 0.630 0.596 0.564 400 0.535 0.507 0.480 0.456 0.432 0.410 0.390 i 0.370 0.352 0.335 0.319 0.303 0.289 0.275 a 0.262 0.7600.711 0.665 0.623 0.583 0.547 0.513 20 0.484 0.452 0.425 0.400 0.376 0.354 0.333 ( 0.314 0.296 0627 0240 0.279 0.263 0.235 0.731 ACT 0.210 0.677 0.249 0.627 0.582 0.222 0.540 22 0.502 040 0.467 0276 h 0.404 0331 0.376 0.434 0.327 0.285 0.305 0266 0210 1 0.266 0.233 0218 0.249 020 0702 ZAS 120 0 101 ce SI 0.204 0.218 0.179 0.168 ACA 0.703 0.191 0.592 0.645 0.544 0.500 0.460 201 0.424 0261 0.391 0322 0.361 0.333 (309 0.308 0265 0.284 0222 0.263 0.243 200 SEO 0.225 104 190 0.209 155 0614 198 0.194 0.180 462 0.676 0.144 0.614 09 0.558 0.508 0.167 0.155 20 0.463 0.134 25 0.422 0.386 205 220 0.322 0.352 247 0.295 0.270 0.247 0200 0.227 101 176 0.208 ACE co 140 0.191 0.176 127 0.162 1923 16 0.149 0.137 200 0260 0.126 0.650 0.116 0.585 0.107 0.475 21 0.527 0.388 0.429 0.350 22 0.287 0.317 0.261 0.237 215 0.215 170 0.195 100 0.178 11 CE 0625 40 20 0.162 0.148 0.135 0.123 EC 0.112 0.557 0.625 0.103 020 0.094 0.444 0.497 200 0.397 0.086 ho 0.356 0.319 0.286 0.257 0.208 150 0.231 0.187 0.168 0127 0.152 194 ca 10 00 no 0.137 0026 co 20 20 0.124 0.112 0.102 0.092 0.083 100 0.076 0.415 0.601 0.530 0.469 0.069 0.368 0.326 0.290 0.229 0.258 0190 0.204 0.182 104 0.163 0.145 0.130 00 00 tanco ca ce 200 0.116 0.104 0.093 0.084 100 0.075 0.068 0.061 022 0.577 0.505 0.055 0.442 0.388 0.340 0.299 0.263 0.232 0.205 0.181 0.160 0.141 0.125 0.111 000 no como noc 0.099 0.088 0.078 0.069 0.555 0.481 20 0.417 0.362 102 0.315 0.275 0.239 0.209 0.062 0.055 0.049 0.044 0.183 00 0.160 0.140 0.123 0.108 0.095 ca 22 0.084 0.074 0.065 0.057 0.051 0.045 0.040 0.035 0.534 0.458 0.394 0.339 0.292 0.252 0.218 0.188 0.163 0.141 0.123 0.107 0.093 0.081 09 0.071 0.062 0.054 0.047 0.042 0.036 0.032 0.028 0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.170 0.146 0.125 0.108 0.093 100 09 0.080 0.069 0020 0.000 40 0024 0.052 0.045 0.039 0.034 0.030 1 0.494 0.026 0.023 0.416 0.350 0.296 0.250 001 0.212 0.1800.153 0.130 0.111 0.095 0.081 200 050 0.069 0.059 02 0.051 0.044 0.038 094 0.032 0.028 0.024 0.021 0.475 0.018 0.396 0.331 0.277 00 0.232 0.194 0.164 C 0.138 0.116 0.098 0.070 0.060 0.051 ma 0.083 0.043 0.037 0.031 0.027 0.023 0.020 0.017 | 0.014 0.456 0.377 0.312 0.258 0.215 0.178 w 0.149 0.124 0.104 0.087 290 0.073 20 ma 0.061 0.051 0.043 0.037 0.031 0.026 0.022 0.019 0.016 0.014 0.012 0.439 0.359 0.294 0.242 an 0.199 0.164 0.135 0.112 an 0.093 0.077 0.064 0.053 0.044 0.037 0.031 0.026 0.022 0.018 0.015 0.013 0.011 0.009 0.422 0.342 0.278 0.226 0.184 0.150 0.123 0.101 0.083 0.068 0.056 0.046 , 0.038 0.032 om 20 een 0.026 0.022 0.018 0.015 0.406 0.326 0.011 0.013 0.262 0.009 0.007 09 0.211 end 0.170 0.138 0.112 0.091 0.074 end 1 0.060 | 0.049 0.040 0.033 0.027 20 0.018 0.015 word 0.022 0.012 0.010 0.009 0.007 0.006 CA 0.390 0.310 0.310 0.247 0.197 0.158 0.126 0.102 0.082 0.066 0.053 | 0.043 0.035 0.028 0.023 0.019 0.015 0.013 0.010 0.008 0.007 0.006 0.005 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.074 0.059 0.047 0.038 0.030 0.024 0.020 0.020 | 0.016 0.0160.013 0.010 | 0.009 0.007 0.006 0.005 0.004 0.361 0.281 0.220 0.172 0.135 0.106 0.084 W.100 0.066 0.053 0.042 0.033 0.026 0.021 0.017 0.014 0.011 0.011 | 0.009 0.007 0.006 0.005 0.004 0.003 0.347 0.268 0.207 0.161 0.125 0.098 0.076 W.110 0.060 0.047 0.037 0.029 0.023 0.018 0.014 0.011 0.009 0.007 0.006 0.005 0.004 0.003 0.002 0.333 0.255 0.196 0.150 0.116 0.090 | 0.069 0.054 0.042 0.033 0.026 0.020 0.016 0.012 0.010 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.321 0.243 0.185 0.141 0.107 0.082 0.063 0.048 0.037 0.029 0.022 0,017 0.014 0.011 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.002 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.044 0.033 0.026 0.020 0,015 0,012 0.009 (2007 0.005 0.004 0.004 0.003 0.003 0.002 0.002 0.001 0.208 0.142 0.097 0.067 0.046 0.032 0.022 0.015 0.011 0.008 0.005 0.004 0.003 0.002 0.001 0.001 0.001 0.000 0.000 0.000 0.000 0.000 21 22 23 24 24 25 28 26 27 28 29 30 40