! Required information [The following information applies to the questions displayed below.] Cardinal Company is considering a five-year project that would require a $2,915,000 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 Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other out- of-pocket costs Depreciation Total fixed expenses Net operating income $2,863,000 1,014,000 1,849,000 $781,000 583,000 1,364,000 $ 485,000 (Hint: Use Microsoft Excel to calculate the discount factor(s).) 2-a. What are the project's annual net cash inflows? Annual net cash inflow 2-b. What is the present value of the project's annual net cash inflows? (Round discount factor to 5 decimal places) Present value
! Required information [The following information applies to the questions displayed below.] Cardinal Company is considering a five-year project that would require a $2,915,000 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 Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other out- of-pocket costs Depreciation Total fixed expenses Net operating income $2,863,000 1,014,000 1,849,000 $781,000 583,000 1,364,000 $ 485,000 (Hint: Use Microsoft Excel to calculate the discount factor(s).) 2-a. What are the project's annual net cash inflows? Annual net cash inflow 2-b. What is the present value of the project's annual net cash inflows? (Round discount factor to 5 decimal places) Present value
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![!
Required information
[The following information applies to the questions displayed below.]
Cardinal Company is considering a five-year project that would require a $2,915,000 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
Variable expenses
Contribution margin
Fixed expenses:
Advertising, salaries, and other out-
of-pocket costs
Depreciation
Total fixed expenses
Net operating income
$2,863,000
1,014,000
1,849,000
$781,000
583,000
1,364,000
$ 485,000
(Hint: Use Microsoft Excel to calculate the discount factor(s).)
2-a. What are the project's annual net cash inflows?
Annual net cash inflow
2-b. What is the present value of the project's annual net cash inflows? (Round discount factor to 5 decimal places)
Present value](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F06728ce9-322a-4c76-b5a7-ad26fd759ab0%2F707f04bc-ef70-4e5a-b05a-3507df90b6a6%2Fydzxihl_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
Cardinal Company is considering a five-year project that would require a $2,915,000 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
Variable expenses
Contribution margin
Fixed expenses:
Advertising, salaries, and other out-
of-pocket costs
Depreciation
Total fixed expenses
Net operating income
$2,863,000
1,014,000
1,849,000
$781,000
583,000
1,364,000
$ 485,000
(Hint: Use Microsoft Excel to calculate the discount factor(s).)
2-a. What are the project's annual net cash inflows?
Annual net cash inflow
2-b. What is the present value of the project's annual net cash inflows? (Round discount factor to 5 decimal places)
Present value
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