Cardinal Company is considering a project that would require a $2,750,000 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 $400,000. The company's discount rate is 18%. The project would provide net operating income each year as follows: $2,849,000 1,122,000 1,727,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs $ 752,000 Depreciation 470,000 Total fixed expenses Net operating income 1,222,000 $ 505,000 Click here to view Exhibit 10-1 and Exhibit 10-2, to determine the appropriate discount factor(s) using tables. Required: What is the project's net present value? (Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.) Net present value Cardinal Company is considering a project that would require a $2,800,000 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 14%. The project would provide net operating income each year as follows: $2,845,000 1,109,000 1,736,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income $ 799,000 500,000 1,299,000 $ 437,000 Click here to view Exhibit 10-1 and Exhibit 10-2, to determine the appropriate discount factor(s) using tables. Required: What is the present value of the project's annual net cash inflows? (Round discount factor(s) to 3 decimal places and final answer to the nearest dollar amount.) Present value EXHIBIT 10-1 Present Value of $1 P= Fn (1+r)" Period 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% 26% 28% 30% 40% 1 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 0.820 0.806 0.794 0.781 0.769 0.714 2 0.925 0.907 0.890 0.857 0.826 0.797 0.769 0.743 0.718 0.694 0.672 0.650 0.630 0.610 0.592 0.510 3 0.889 0.864 0.840 0.794 0.751 0.712 0.675 0.641 0.609 0.579 0.551 0.524 0.500 0.477 0.455 0.364 4 0.855 0.823 0.792 0.735 0.683 0.636 0.592 0.552 0.516 0.482 0.451 0.423 0.397 0.373 0.350 0.260 5 0.822 0.784 0.747 0.681 0.621 0.567 0.519 0.476 0.437 0.402 0.370 0.341 0.315 0.291 0.269 0.186 6 0.790 0.746 0.705 0.630 0.564 0.507 0.456 0.410 0.370 0.335 0.303 0.275 0.250 0.227 0.207 0.133 7 0.760 0.711 0.665 0.583 0.513 0.452 0.400 0.354 0.314 0.279 0.249 0.222 0.198 0.178 0.159 0.095 8 0.731 0.677 0.627 0.540 0.467 0.404 0.351 0.305 0.266 0.233 0.204 0.179 0.157 0.139 0.123 0.068 9 0.703 0.645 0.592 0.500 0.424 0.361 0.308 0.263 0.225 0.194 0.167 0.144 0.125 0.108 0.094 0.048 10 0.676 0.614 0.558 0.463 0.386 0.322 0.270 0.227 0.191 0.162 0.137 0.116 0.099 0.085 0.073 0.035 11 0.650 0.585 0.527 0.429 0.350 0.287 0.237 0.195 0.162 0.135 0.112 0.094 0.079 0.066 0.056 0.025 12 0.625 0.557 0.497 0.397 0.319 0.257 0.208 0.168 0.137 0.112 0.092 0.076 0.062 0.052 0.043 0.018 13 0.601 0.530 0.469 0.368 0.290 0.229 0.182 0.145 0.116 0.093 0.075 0.061 0.050 0.040 0.033 0.013 14 0.577 0.505 0.442 0.340 0.263 0.205 0.160 0.125 0.099 0.078 0.062 0.049 0.039 0.032 0.025 0.009 15 0.555 0.481 0.417 0.315 0.239 0.183 0.140 0.108 0.084 0.065 0.051 0.040 0.031 0.025 0.020 0.006 16 0.534 0.458 0.394 0.292 0.218 0.163 0.123 0.093 0.071 0.054 0.042 0.032 0.025 0.019 0.015 0.005 17 0.513 0.436 0.371 0.270 0.198 0.146 0.108 0.080 0.060 0.045 0.034 0.026 0.020 0.015 0.012 0.003 18 0.494 0.416 0.350 0.250 0.180 0.130 0.095 0.069 0.051 0.038 0.028 0.021 0.016 0.012 0.009 0.002 19 0.475 0.396 0.331 0.232 0.164 0.116 0.083 0.060 0.043 0.031 0.023 0.017 0.012 0.009 0.007 0.002 20 0.456 0.377 0.312 0.215 0.149 0.104 0.073 0.051 0.037 0.026 0.019 0.014 0.010 0.007 0.005 0.001 21 0.439 0.359 0.294 0.199 0.135 0.093 0.064 0.044 0.031 0.022 0.015 0.011 0.005 0.006 0.004 0.001 22 0.422 0.342 0.278 0.184 0.123 0.083 0.056 0.038 0.026 0.018 0.013 0.009 0.006 0.004 0.003 0.001 23 0.406 0.326 0.262 0.170 0.112 0.074 0.049 0.033 0.022 0.015 0.010 0.007 0.005 0.003 0.002 24 0.390 0.310 0.247 0.158 0.102 0.066 0.043 0.028 0.019 0.013 0.008 0.006 0.004 0.003 0.002 25 0.375 0.295 0.233 0.146 0.092 0.059 0.038 0.024 0.016 0.010 0.007 0.005 0.003 0.002 0.001 26 0.361 0.281 0.220 0.135 0.084 0.053 0.033 0.021 0.014 0.009 0.006 0.004 0.002 0.002 0.001 27 0.347 0.268 0.207 0.125 0.076 0.047 0.029 0.018 0.011 0.007 0.005 0.003 0.002 0.001 0.001 28 0.333 0.255 0.196 0.116 0.069 0.042 0.026 0.016 0.010 0.006 0.004 0.002 0.002 0.001 0.001 29 0.321 0.243 0.185 0.107 0.063 0.037 0.022 0.014 0.008 0.005 0.003 0.002 0.001 0.001 30 0.308 0.231 0.174 0.099 0.057 0.033 0.020 0.012 0.007 0.004 0.003 0.002 0.001 0.001 40 0.208 0.142 0.097 0.046 0.022 0.011 0.005 0.003 0.001 0.001 EXHIBIT 10-2 Present Value of an Annuity of $1 1 1 P = (1 + r)" Period 4% 5% 6% 8% 30% 40% 1 0.962 0.952 0.943 0.926 10% 12% 14% 16% 18% 20% 22% 0.909 0.893 0.877 0.862 0.847 0.833 0.820 1.736 1.690 1.647 1.605 1.566 1.528 1.492 24% 26% 28% 0.806 0.794 0.781 0.769 1.457 1.424 1.392 1.361 0.714 2 1.886 1.859 1.833 1.783 1.224 3 2.775 2.723 2.673 2.577 2.487 2.402 2.322 2.246 2.174 2.106 2.042 1.981 1.923 1.868 1.816 1.589 4 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2.798 2.690 2.589 2.494 2.404 2.320 2.241 2.166 1.879 5 4.452 4.330 4.212 3.993 3.791 3.605 3.433 3.274 3.127 2.991 2.864 2.745 2.635 2.532 2.436 2.035 6 5.242 5.076 4.917 4.623 4.355 4.111 3.889 3.685 3.498 3.326 3.167 3.020 2.SSS 2.759 2.643 2.168 7 6.002 5.786 5.582 5.206 4.868 4.564 4.288 4.039 3.812 3.605 3.416 3.242 3.083 2.937 2.802 2.263 S 6.733 6.463 6.210 5.747 5.335 4.968 4.639 4.344 4.078 3.837 3.619 3.421 3.241 3.076 2.925 2.331 9 7.435 7.108 6.802 6.247 5.759 5.328 4.946 4.607 4.303 4.031 3.756 3.566 3.366 3.184 3.019 2.379 10 8.111 7.722 7.360 6.710 6.145 5.650 5.216 4.833 4.494 4.1923.923 3.662 3.465 3.269 3.092 2.414 11 8.760 8.306 7.887 7.139 6.495 5938 5.453 5.029 4.656 4.327 4.035 3.776 3.544 3.335 3.147 3.147 2438 12 9.385 8.863 8.384 7.536 6.814 6.194 5,660 5.197 4.793 4.439 4.127 3.851 3.606 3.387 3.190 2456 13 9.986 9.394 8.853 7.904 7.103 6.424 5.842 5.342 4.910 4.533 4.203 3.912 3.656 3.427 3.223 2.468 14 10.563 9.899 9.295 S. 244 7.367 6.628 6.002 5.468 5.00S 4.611 4.265 3.962 3.695 3.459 3.249 2.477 15 11.118 10.380 9.712 8.559 7.606 6.811 6.142 5.575 5.575 5.092 4.675 4.315 4.001 3.726 3.483 3.268 2.484 16 11.652 10.838 10.106 8.851 7.824 6.974 6.265 5.669 5.162 4.730 4.357 4.033 3.751 3.503 3.283 2.489 17 12.166 11.274 10.477 9.122 8.022 7.120 6.373 5.749 5.222 4.775 4.391 4.059 3.771 3.518 3.295 2.492 IS 12.659 11.690 10.828 9 372 8.201 7.250 6.467 5.818 5.273 4.812 4.419 4.080 3.786 3.529 3.304 2.494 19 13.134 12.085 11.158 9.604 8.365 7.366 6.550 5.877 5.316 4.844 4.442 4.097 3.799 3.539 3.311 2.496 20 13.590 12.462 11.470 9.818 8 514 7.469 6,623 5.929 5.353 4 870 4.460 4.110 3.80S 3.546 3.316 2.497 21 14.029 12.821 11.764 10.017 8.649 7.562 6.687 5973 5.384 4.891 4.476 4.121 3.816 3.551 3.320 3.320 2.498 22 14.451 13.163 12.042 10 201 8.772 7.645 6.743 6.011 5.410 4.909 4.488 4.130 3.822 3.556 3.323 2.498 23 14.857 13.489 12.303 10.371 8.883 7.718 6.792 6.792 6.044 5.432 4.925 4.499 4.137 3.827 3.325 2.499 24 15.247 13.799 12.550 10.529 8.985 7.784 6.835 6.835 6.073 5.451 4.937 4.507 4.143 3.831 3.327 2.499 25 15.622 14.094 12.783 10.675 9.077 7.843 6.873 6.873 6.097 5.467 4.948 4.514 4.147 3.834 3.329 2.499 26 15.983 14.375 13.003 10.810 9.161 7.896 6.906 6.906 6.118 5.480 4.956 4.520 4.151 3.837 3.330 2.500 27 16.330 14.643 13.211 10.935 9.237 7.943 6.935 4.525 4.154 3.839 3.331 2.500 6.935 6136 5.492 4.964 6.961 6.152 5.5024970 28 16.663 14.898 13.406 11.051 9.307 7.984 6.961 4528 7.157 3.840 3.331 2.500 29 16.984 15.141 13.591 11.158 9.370 8.022 6.983 6.983 6.166 6.166 5510 +975 4531 4.159 3.841 3.332 2.500 30 17292 15.373 13,765 11.258 9427 8.055 7003 7.003 6.177 5.517 4.979 4534 4.160 3.842 3.332 2 500 40 19.793 17.159 15.046 11.925 9.779 8.244 7.105 7.105 6.234 5.548 4.997 4.544 4.166 3.846 3.333 2.500