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Cardinal Company is considering a five-year project that would require a $2,805,000 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 $2,805,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 14%. The project would provide net operating income in each of five years as follows: Sales Variable expenses Contribution margin Fixed expenses: $2,741,000 1,125,000 1,616,000 Advertising, salaries, and other fixed out-of-pocket costs Depreciation $642,000 561,000 901,203,000 Total fixed expenses Net operating income $ 413, 000 Click here to view Exhibit 138-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using table
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