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Cardinal Company is considering a five-year project that would require a $2,755,000 investment in equipment...

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Accounting

Cardinal Company is considering a five-year project that would require a $2,755,000 investment in equipment with a useful life of five years and no salvage value. The companys discount rate is 14%. The project would provide net operating income in each of five years as follows:
Sales $ 2,875,000
Variable expenses 1,124,000
Contribution margin 1,751,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs $ 721,000
Depreciation 551,000
Total fixed expenses 1,272,000
Net operating income $ 479,000
Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table.
Foundational 12-3(Algo)
3. What is the present value of the projects annual net cash inflows?

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