Cardinal Company is considering a fiveyear project that would require a $ investment in equipment with a useful life of five years and no salvage value. The companys discount rate is 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 outofpocket costs $
Depreciation
Total fixed expenses
Net operating income $
Click here to view Exhibit B and Exhibit B to determine the appropriate discount factors using table.
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What is the present value of the projects annual net cash inflows?
