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Cardinal Company is considering a project that would require a $2.915,000 Investment in equipment with a useful life of five years. At the end of
Cardinal Company is considering a project that would require a $2.915,000 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: $2,746,000 1,126,000 Sales Varlable expenses 1.620,000 Contribution margin Flxed expenses: Advertising, salarles, and other fixed out-of-pocket costs Depreciation 615,000 523,000 Total fixed expenses 1,138,000 Net operating income $482,000
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