Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information [The following information applies to the questions displayed below) Cardinal Company is considering a five-year project that would require a $2,755,000 investment in

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

Required information [The following information applies to the questions displayed below) Cardinal Company is considering a five-year project that would require a $2,755,000 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: $ 2,875,000 1,124,000 1,751,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income $ 721,000 551,000 1,272,000 5 479,000 Click here to view Exhibit 14B-1 and Exhibit 14B-2. to determine the appropriate discount factor(s) using table. 2 What are the project's annual net cash inflows? Annual net cash inflow Required information [The following information applies to the questions displayed below.] Cardinal Company is considering a five-year project that would require a $2,755,000 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: $ 2,875,000 1,124,000 1,751,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income $ 721,000 551,000 1,272,000 $ 479,000 Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using table. 3. What is the present value of the project's annual net cash inflows? (Round your final answer to the nearest whole dollar amount.) Present value Required information [The following information applies to the questions displayed below.) Cardinal Company is considering a five-year project that would require a $2,755,000 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: $ 2,875,000 1,124,000 1,751,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income $721,000 551,000 1,272,000 $ 479,000 Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using table. 4. What is the project's net present value? (Round final answer to the nearest whole dollar amount.) Net present value ! Required information [The following information applies to the questions displayed below.] Cardinal Company is considering a five-year project that would require a $2,755,000 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: $ 2,875,000 1,124,000 1,751,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income $ 721,000 551,000 1,272,000 $ 479,000 Click here to view Exhibit 14B-1 and Exhibit 14B-2 to determine the appropriate discount factor(s) using table. 5. What is the profitability index for this project? (Round your answer to 2 decimal places.) Profitability index

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Managerial Accounting Version 3.0

Authors: Kurt Heisinger, Joe Ben Hoyle

1st Edition

1453399410, 9781453399415

More Books

Students also viewed these Accounting questions

Question

finding entry-level positions;

Answered: 1 week ago

Question

Why are so many people afraid of communication?

Answered: 1 week ago