The Foundational $15($Algo$)[$LO$12-1,$ LO$12-2,$ LO$12-3,$ LO$12-5,$ LO$12-6]$

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Cardinal Company is considering a five$-$year project that would require a $$2,812,000$ investment in equipment with a useful life of five years and no salvage value. The company$$s discount rate is $16\%.$ The project would provide net operating income in each of five years as follows:

Sales $ $2,855,000$

Variable expenses $1,010,000$

Contribution margin $1,845,000$

Fixed expenses:

Advertising, salaries, and other fixed out$-$of$-$pocket costs $ $798,000$

Depreciation $562,400$

Total fixed expenses $1,360,400$

Net operating income $ $484,600$

Click here to view Exhibit $12$B$-1$ and Exhibit $12$B$-2,$ to determine the appropriate discount factor$($s$)$ using table. $1.$ Which item$($s$)$ in the income statement shown above will not affect cash flows? Salesunanswered

Variable expensesunanswered

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

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? $4.$ What is the project$$s net present value? $6.$ What is the project$$s internal rate of return? $7.$ What is the project$$s payback period? $8.$ What is the project$$s simple rate of return for each of the five years? $9.$ If the company$$s discount rate was $18\%$ instead of $16\%,$ would you expect the project's net present value to be higher, lower, or the same? $10.$ If the equipment had a salvage value of $$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? $12.$ 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? $13.$ 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$$s actual net present value? $14.$ Assume a postaudit showed that all estimates $($including total sales$)$ were exactly correct except for the variable expense ratio, which actually turned out to be $45\%.$ What was the project$$s actual payback period? $15.$ 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 $45\%.$ What was the project$$s actual simple rate of return?