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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 $2,750,000 investment
Required information [The following information applies to the questions displayed below.] Cardinal Company is considering a five-year project that would require a $2,750,000 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 $2,849,000 1,122,000 1,727,000 Fixed expenses: Advertising, salaries, and other i fixed out-of-pocket costs Depreciation $752,000 550,000 Total fixed expenses Net operating income 1,302,000 $425,000 Click here to view Exhibit 138-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using table. 13. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio, which actually turned out to be 45%. What was the project's actual net present value? (Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, intermediate calculations and final answer to the nearest whole dollar amount.) Not present value
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