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

Cardinal Company is considering a five-year project that would require a $2,870,000 investment in equipment with a useful life of five years and no salvage value. The companys discount rate is 12%. The project would provide net operating income in each of five years as follows:

Sales			$	2,861,000
Variable expenses				1,101,000
Contribution margin				1,760,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs	$	705,000
Depreciation		574,000
Total fixed expenses				1,279,000
Net operating income			$	481,000

Click here to view Exhibit 8B-1 and Exhibit 8B-2, to determine the appropriate discount factor(s) using tables.

2-a. What are the projects annual net cash inflows?

2-b. What is the present value of the projects annual net cash inflows? (Round discount factor to 3 decimal places.)

3. What is the projects net present value? (Round discount factor(s) to 3 decimal places and final answer to the nearest whole dollar amount.)

5. What is the project profitability index for this project? (Round discount factor(s) to 3 decimal places and final answer to 2 decimal places.)

6. What is the projects internal rate of return? (Round your answer to nearest whole percent.)

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

8. What is the projects simple rate of return for each of the five years? (Round your answer to 2 decimal places. i.e. 0.12342 should be considered as 12.34%.)

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 projects actual simple rate of return? (Round your answer to 2 decimal places. i.e. 0.12342 should be considered as 12.34%.)