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Required information The following information applies to the questions displayed below. Cardinal Company is considering a five-year project that would require a $2,945,000 investment in
Required information The following information applies to the questions displayed below. Cardinal Company is considering a five-year project that would require a $2,945,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 18%. The project would provide net operating income in each of five years as follows: Sales Variable expenses Contribution margin Fixed expenses: $2,873,000 1,019,000 1,854,000 Advertising, salaries, and other fixed out-of-pocket costs Depreciation $754,000 589,000 Total fixed expenses Net operating income 1,343,000 $ 511,000 Click here to view Exhibit 138-1 and Exhibit 138-2, to determine the appropriate discount factor(s) using table
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