[The following information applies to the questions displayed below] Cardinal Company is considering a five-year project that would require a $2,805,000 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: Sales Variable expenses $ 2,741,000 1,125,000 Contribution margin 1,616,000 Fixed expenses: Advertising, salaries, and other fixed out- of-pocket costs Depreciation $ 642,000 561,000 Total fixed expenses 1,203,000 $ 413,000 Net operating income Click here to view Exhibit 12B-1 and Exhibit 128-2 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 tow empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as Incorrect.) Sales Variable expenses Advertising, salaries, and other fixed out-of-pocket costs expenses Depreciation expense Cardinal Company is considering a five-year project that would require a $2,805,000 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: Sales variable expenses $2,741,000 1,125,000 1,616,000 Contribution margin Fixed expenses: Advertising, salaries, and other fixed out- of-pocket costs $ 642,000 Depreciation 561,000 Total fixed expenses 1,203,000 Net operating income $ 413,000 Click here to view Exhibit 12B-1 and Exhibit 12B-2. to determine the appropriate discount factor(s) using table. Foundational 12-2 (Algo) 2. What are the project's annual net cash inflows? Annual net cash inflow Cardinal Company is considering a five-year project that would require a $2,805,000 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 Sales variable expenses $2,741,000 1,125,000 Contribution margin i 1,616,000 Fixed expenses: Advertising, salaries, and other fixed out- of-pocket costs $ 642,000 Depreciation 561,000 Total fixed expenses 1,203,000 Net operating income $ 413,000 Click here to view Exhibit 12B-1 and Exhibit 128-2. to determine the appropriate discount factor(s) using table. Foundational 12-3 (Algo) 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 Cardinal Company is considering a five-year project that would require a $2,805,000 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: Sales variable expenses Contribution margin Advertising, salaries, and other fixed out- Fixed expenses: of-pocket costs Depreciation Total fixed expenses $ 2,741,000 1,125,000 1,616,000 $ 642,000 561,000 1,203,000 $ 413,000 Net operating income Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table. Foundational 12-4 (Algo) 4. What is the project's net present value? (Round final answer to the nearest whole dollar amount.) Net present value Cardinal Company is considering a five-year project that would require a $2,805,000 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: Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out- of-pocket costs Depreciation Total fixed expenses $ 2,741,000 1,125,000 1,616,000 $ 642,000 561,000 1,203,000 $ 413,000 Net operating income Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table. Foundational 12-5 (Algo) 5. What is the profitability Index for this project? (Round your answer to 2 decimal places.) Profitability index Cardinal Company is considering a five-year project that would require a $2,805,000 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: Sales Variable expenses $ 2,741,000 1,125,000 Contribution margin Fixed expenses: Advertising, salaries, and other fixed out- of-pocket costs Depreciation $ 642,000 561,000 Total fixed expenses 1,616,000 1,203,000 Net operating income $ 413,000 Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table.. Foundational 12-6 (Algo) 6. What is the project's internal rate of return? Project's internal rate of retum % Cardinal Company is considering a five-year project that would require a $2,805,000 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: Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out- of-pocket costs Depreciation $ 642,000 561,000 $ 2,741,000 1,125,000 1,616,000 Total fixed expenses 1,203,000 Net operating income $ 413,000 Click here to view Exhibit 12B-1 and Exhibit 128-2 to determine the appropriate discount factor(s) using table. Foundational 12-7 (Algo) 7. What is the project's payback period? (Round your answer to 2 decimal places.) Project's payback period years Cardinal Company is considering a five-year project that would require a $2,805,000 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. Sales Variable expenses Contribution margin $ 2,741,000 1,125,000 1,616,000 Fixed expenses: Advertising, salaries, and other fixed out- of-pocket costs $ 642,000 Depreciation 561,000 Total fixed expenses 1,203,000 Net operating income) $ 413,000 Click here to view Exhibit 12B-1 and Exhibit 12B-2. to determine the appropriate discount factor(s) using table. Foundational 12-8 (Algo) 8. What is the project's simple rate of return for each of the five years? (Round your answer to 2 decimal places.) Simple rate of relum % Cardinal Company is considering a five-year project that would require a $2,805,000 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: Sales Variable expenses $ 2,741,000 1,125,000 1,616,000 Contribution margin Fixed expenses: Advertising, salaries, and other fixed out- of-pocket costs Depreciation $ 642,000 561,000 Total fixed expenses Net operating income 1,203,000 $ 413,000 Click here to view Exhibit 12B-1 and Exhibit 128-2. to determine the appropriate discount factor(s) using table. Foundational 12-9 (Algo) 9. If the company's discount rate was 16% Instead of 14%, would you expect the project's net present value to be higher, lower, or the same? O Higher O Lower O Same Cardinal Company is considering a five-year project that would require a $2,805,000 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: sales Variable expenses contribution margin Fixed expenses: Advertising, salaries, and other fixed out- of-pocket costs Depreciation $ 642,000 561,000 $ 2,741,000 1,125,000 1,616,000 Total fixed expenses Net operating income 1,203,000 $ 413,000 Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table. Foundational 12-10 (Algo) 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? O Higher O Lower O Same Cardinal Company is considering a five-year project that would require a $2,805,000 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: sales Variable expenses $ 2,741,000 1,125,000 Contribution margin Fixed expenses: Advertising, salaries, and other fixed out- of-pocket costs Depreciation $ 642,000 561,000 1,616,000 Total fixed expenses Net operating income 1,203,000 $ 413,000 Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table. Foundational 12-11 (Algo) 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? O Higher O Lower O Same Cardinal Company is considering a five-year project that would require a $2,805,000 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: Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out- of-pocket costs Depreciation $ 642,000 561,000 $ 2,741,000 1,125,000 1,616,000 Total fixed expenses Net operating income 1,203,000 $ 413,000 Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table. Foundational 12-12 (Algo) 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? O Higher O Lower O Same Cardinal Company is considering a five-year project that would require a $2,805,000 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: Sales variable expenses $ 2,741,000 1,125,000 1,616,000 Contribution margin Fixed expenses: Advertising, salaries, and other fixed out- of-pocket costs $ 642,000 Depreciation 561,000 Total fixed expenses 1,203,000 Net operating income $ 413,000 Click here to view Exhibit 128-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table. Foundational 12-13 (Algo) 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.) Net present value Cardinal Company is considering a five-year project that would require a $2,805,000 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: Sales variable expenses $ 2,741,000 1,125,000 1,616,000 Contribution margin Fixed expenses: Advertising, salaries, and other fixed out- of-pocket costs $ 642,000 Depreciation 561,000 Total fixed expenses 1,203,000 Net operating income $ 413,000 Click here to view Exhibit 128-1 and Exhibit 12B-2. to determine the appropriate discount factor(s) using table. Foundational 12-14 (Algo) 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.) Payback period years Cardinal Company is considering a five-year project that would require a $2,805,000 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: Sales $ 2,741,000 1,125,000 variable expenses Contribution margin 1,616,000 Fixed expenses: Advertising, salaries, and other fixed out- of-pocket costs Depreciation $ 642,000 561,000 Total fixed expenses 1,203,000 $ 413,000 Net operating income Click here to view Exhibit 12B-1 and Exhibit 128-2, to determine the appropriate discount factor(s) using table. Foundational 12-15 (Algo) 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.) Simple rate of return %