operating income     $ 509,000     Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table. rev: 05_11_2019_QC_CS-168512   Required: 1. Which

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Cardinal Company is considering a five-year project that would require a $2,955,000 investment in equipment with a useful life of five years and no salvage value. The company’s discount rate is 18%. The project would provide net operating income in each of five years as follows:

 

 
Sales     $ 2,865,000
Variable expenses       1,015,000
Contribution margin       1,850,000
Fixed expenses:        
Advertising, salaries, and other fixed out-of-pocket costs $ 750,000    
Depreciation   591,000    
Total fixed expenses       1,341,000
Net operating income     $ 509,000
 

 

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

rev: 05_11_2019_QC_CS-168512

 

Required:

1. Which item(s) in the income statement shown above will not affect cash flows

 

 

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