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Cardinal Company is considering a project that would require a $2.865,000 investment in equipment with a useful life of five years. At the end of
Cardinal Company is considering a project that would require a $2.865,000 investment in equipment with a useful life of five years. At the end of five years, the project would terminate and the equipment would be sold for its salvage value of $300,000. The company's discount rate is 12%. The project would provide net operating income each year as follows: $2,869,000 1,126,000 1,743,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income $ 709,000 513,000 1,222,000 $ 521,000 Required: What are the projects annual net cash inflows? Annual net cash inflow
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