[The following information applies to the questions displayed below] Cardinal Company is considering a five-year project that would require a $2.810,000 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 fixed out-of-pocket costs $ 782,000 562,000 $ 2,847,000 1,121,000 1,726,000 Depreciation Total fixed expenses Net operating income Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using table 1,344,000 $ 382,000 What is the present value of the project's annual net cash inflows? (Round your final answer to the nearest whole dollar amount.)
[The following information applies to the questions displayed below] Cardinal Company is considering a five-year project that would require a $2.810,000 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 fixed out-of-pocket costs $ 782,000 562,000 $ 2,847,000 1,121,000 1,726,000 Depreciation Total fixed expenses Net operating income Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using table 1,344,000 $ 382,000 What is the present value of the project's annual net cash inflows? (Round your final answer to the nearest whole dollar amount.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Required information
[The following information applies to the questions displayed below.]
Cardinal Company is considering a five-year project that would require a $2.810,000 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.
fixed out-of-pocket costs
$ 782,000
562,000
Depreciation
Total fixed expenses
Net operating income
Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using table
Answer is complete but not entirely correct.
Present value
$ 2,847,000
1,121,000
1,726,000
3433,000
3. What is the present value of the project's annual net cash inflows? (Round your final answer to the nearest whole dollar amount.)
1,344,000
$ 382,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa0eafbc6-1f94-419c-999b-1460c5645b59%2F4ef9676f-54eb-4708-875b-3903c0fcd4fc%2Fh8mmlr_processed.jpeg&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 $2.810,000 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.
fixed out-of-pocket costs
$ 782,000
562,000
Depreciation
Total fixed expenses
Net operating income
Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using table
Answer is complete but not entirely correct.
Present value
$ 2,847,000
1,121,000
1,726,000
3433,000
3. What is the present value of the project's annual net cash inflows? (Round your final answer to the nearest whole dollar amount.)
1,344,000
$ 382,000
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