Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Foundational 15 (LO12-1, LO12-2, L012-3, L012-5, L012-6] [The following information applies to the questions displayed below.) Cardinal Company is considering a five-year project that

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
The Foundational 15 (LO12-1, LO12-2, L012-3, L012-5, L012-6] [The following information applies to the questions displayed below.) Cardinal Company is considering a five-year project that would require a $2,975,000 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: $2,735,000 1,000,000 1,735,000 Salon Variable expenses Contribution margin Pixed expenses Advertising, salaries, and other fixed out-of-pocket conta Depreciation Total fixed expenses Nat operating incom $735,000 595,000 1,330,000 405,000 Click here to view Exhibit 120-1 and Exhibit 120-2. to determine the appropriate discount factor(s) using table. Foundational 12-1 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) Sales Variable expenses Advertising, salaries, and other fixed out-of-pocket costs expenses Depreciation expense Required Information The Foundational 15 [LO12-1, LO12-2, L012-3, L012-5, L012-6) [The following information applies to the questions displayed below.) Cardinal Company is considering a five-year project that would require a $2,975,000 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: $2,735,000 1,000,000 1,735,000 Sales Variable expenses Contribution margin Fixed expenses Advertising, salaries, and other fixed out-of-pocket coats Depreciation Total fixed expenses Net operating Income $735,000 595,000 1.330,000 $ 405,000 Click here to view Exhibit 128-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table. Foundational 12-2 2. What are the project's annual net cash inflows? Annual cash lotilow Required Information The Foundational 15 [LO12-1, L012-2, L012-3, L012-5, L012-6) (The following information applies to the questions displayed below.) Cardinal Company is considering a five-year project that would require a $2,975,000 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. $2,735,000 1,000,000 1,735,000 Sales Variable expenses Contribution margin Fixed expenses Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Not operating income $735,000 595,000 1,330.000 $2405,000 Click here to view Exhibit 12B-1 and Exhibit 128-2, to determine the appropriate discount factor(s) using table. Foundational 12-7 7. What is the project's payback period? (Round your answer to 2 decimal places.) Proje's payback period years Required Information The Foundational 15 [LO12-1, LO12-2, L012-3, L012-5, L012-6) [The following information applies to the questions displayed below.) Cardinal Company is considering a five-year project that would require a $2,975,000 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: $2,735,000 1,000,000 1,735,000 Sales Variable expenses Contribution margin Fixed expenses Advertising, malaries, and other fixed out-of-pocket conta Depreciation Total fixed expenses Not operating income $735,000 595.000 1,330,000 405,000 Click here to view Exhibit 123.1 and Exhibit 128-2, to determine the appropriate discoubt factor(s) using table. Foundational 12-8 8. What is the project's simple rate of return for each of the five years? (Round your answer to 2 decimal places.) morale of tum The Foundational 15 (LO12-1, LO12-2, LO12-3, L012-5, L012-6] The following information applies to the questions displayed below) Cardinal Company is considering a five-year project that would require a $2,975,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 19%. The project would provide net operating income in each of five years as follows: $2,735,000 1,000,000 1,735,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket conta Depreciation Total fixed expenses Net operating income $735,000 595,000 1,330,000 $ 405,000 Click here to view Exhibit 128-1 and Exhibit 128-2. to determine the appropriate discount factor(s) using table. Foundational 12-13 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? (Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, intermediate calculations and final answer to the nearest whole dollar amount.) The Foundational 15 [L012-1, LO12-2, L012-3, L012-5, L012-6] The following information applies to the questions displayed below.) Cardinal Company is considering a five-year project that would require a $2,975,000 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: $2,735,000 1,000,000 1,735,000 Sales Variable expenses Contribution margin Fixed expenses Advertising, salaries, and other fixed out-of-pocket conto Depreciation Total Fixed expenses Net operating Income $735,000 595,000 1,330,000 $ 405,000 Click here to view Exhibit 12B-1 and Exhibit 128-2, to determine the appropriate discount factor(s) using table. Foundational 12-15 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? (Round your answer to 2 decimal places.) Simple tala at rolum

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

Behavioural Public Finance Individuals, Society, And The State

Authors: M Mustafa Erdogdu

1st Edition

0367631202, 9780367631208

More Books

Students also viewed these Accounting questions

Question

Describe the major barriers to the use of positive reinforcement.

Answered: 1 week ago