Cardinal Company is considering a project that would require a $2,810,000 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 $500,000. The companys discount rate is 16%. The project would provide net operating income each year as follows:

Sales			$	2,847,000
Variable expenses				1,121,000
Contribution margin				1,726,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs	$	782,000
Depreciation		462,000
Total fixed expenses				1,244,000
Net operating income			$	482,000

6.	What is the project profitability index for this project? (Use the appropriate table to determine the discount factor(s) and final answer to 2 decimal places.)

7.	What is the projects payback period? (Round your answer to 2 decimal places.)

8.	What is the projects simple rate of return for each of the five years? (Round your answer to 2 decimal places. (i.e 0.1234 should be entered as 12.34.))

12.	If the equipments salvage value was $700,000 instead of $500,000, what would be the projects simple rate of return? (Round your answer to 2 decimal places. (i.e 0.1234 should be entered as 12.34.))