****PLEASE SHOW WORK*******

1. Which item(s) in the income statement shown above will not affect cash flows?

2. What are the projects annual net cash inflows?

3. What is the present value of the projects annual net cash inflows?

4. What is the projects net present value?

5. What is the project profitability index for this project? (Round your answer to the nearest whole percent.)

6. What is the projects internal rate of return to the nearest whole percent?

7. What is the projects payback period?

8. What is the projects simple rate of return for each of the five years?

Cardinal Company is considering a five-year 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: $2,735,000 1,000,000 1,735,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed $735,000 595,000 out-of-pocket costs Depreciation 1,330,000 405,000 Total fixed expenses Net operating income