LO14-1, LO14-2, LO14-3, LO14-5, LO14-6 Cardinal Company is consideritg a fiveyear project that would require a $2,975,000 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: Recuired: (Answer cach question by referring to the original data unless instructed otherwise.) 1. Which item(s) in the income statement shown above will not affoct cash flows? 2. What ate the project's anncal net cadh inflows? 3. What is the prescnt valae of the project's annual net cash inflows? 4. What is the project's net present value? 5. What is the protitability index for this projoct? (Round your answer to the nearest whole percent) 6. What is the project's isternal rate of return to the nearest whole pereent? 7. What is the project's payback period? 8. What is the project's simple nate of retar for cach of the five years? 9. If the company's discount nate was 16% instead of 14%, would you expect the project's net present value to be higher than, lower than, or the same as your answer to requirement 47 No computations are necessary. 10. If the equiproent had a salvage value of $300900 at the end of five years, would you expect the project's payback period to be higher than, lower than, or the same as your answer to requirement 77 No computations are becesary 11. If the equipment had a salvage valoe of 5300,000 at the ced of five years, would you expect the project's net present valoe to be higher than, lower than, or the same as your answer to requirement 3? No computations are necessary. 12. If the equipment had a salvage value of 5300,000 at the end of five years, would you expect the project's simple rate of return to be higher than, lower than, or the sme as your answer to requirement 8? No computations are neceisary. 13. Assume a postadit showed that all estimates (includiag total sales) were exactly correct exeept for the variable expense ratio, which actually turned out to be 45\% What was the projoct's actual net present valie? 14. Aswume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio, which actually tumed out to be d5\%. What was the project's actual payback period? 15. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio, which actially turned out to be 45\%. What was the project's actual simple rate of retum