$[$The following information applies to the questions displayed below.$]$

Cardinal Company is considering a five$-$year project that would require a $$2,915,000$ investment in equipment with a useful life of five years and no salvage value. The company$$s discount rate is $12\%.$ The project would provide net operating income in each of five years as follows:

Sales $ $2,746,000$

Variable expenses $1,126,000$

Contribution margin $1,620,000$

Fixed expenses:

Advertising, salaries, and other fixed out$-$of$-$pocket costs $ $615,000$

Depreciation $583,000$

Total fixed expenses $1,198,000$

Net operating income $ $422,000$

Click here to view Exhibit $12$B$-1$ and Exhibit $12$B$-2,$ to determine the appropriate discount factor$($s$)$ using table.

Foundational $12-1($Algo$)$

Required:

$1.$ Which item$($s$)$ in the income statement shown above will not affect cash flows? $($You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.$)$

check all that apply

Sales

Variable expenses

Advertising, salaries, and other fixed out$-$of$-$pocket costs expenses

Depreciation expense

$2.$ What are the project$$s annual net cash inflows?

$3.$ What is the present value of the project$$s annual net cash inflows? $($Round your final answer to the nearest whole dollar amount.$)$

$4.$ What is the project$$s net present value? $($Round final answer to the nearest whole dollar amount.$)$

$6.$ What is the project$$s internal rate of return?

$7.$ What is the project$$s payback period? $($Round your answer to $2$ decimal places.$)$

$8.$ What is the project$$s simple rate of return for each of the five years? $($Round your answer to $2$ decimal places.$)$

$9.$ If the company$$s discount rate was $14\%$ instead of $12\%,$ would you expect the project's net present value to be higher, lower, or the same?

$10.$ If the equipment had a salvage value of $$300,000$ at the end of five years, would you expect the project$$s payback period to be higher, lower, or the same?

$11.$ If the equipment had a salvage value of $$300,000$ at the end of five years, would you expect the project's net present value to be higher, lower, or the same?

multiple choice

Higher

Lower

Same

$12.$ If the equipment had a salvage value of $$300,000$ at the end of five years, would you expect the project$$s simple rate of return to be higher, lower, or the same?

multiple choice

Higher

Lower

Same

$13.$ 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 $50\%.$ What was the project$$s actual net present value? $($Negative amount should be indicated by a minus sign. Round intermediate calculations and final answer to the nearest whole dollar amount.$)$

$14.$ 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 $50\%.$ What was the project$$s actual payback period? $($Round your answer to $2$ decimal places.$)$

$15.$ 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 $50\%.$ What was the project$$s actual simple rate of return? $($Round your answer to $2$ decimal places.$)$