Cardinal Company is considering a five-year project that would require a $2,955,000 investment in equipment...
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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 16%. The project would provide net operating income in each of five years as follows Sales Variable expenses Contribution margin Fixed expenses: $2,871,000 1,018,000 1,853,000 Advertising, salaries, and other fixed out-of-pocket costs Depreciation 753,000 591,344,000 Total fixed expenses Net operating income $ 509,000 Click here to view Exhibit 13B-1 and Exhibit 138-2, to determine the appropriate discount factor(s) using table. 5. What is the project profitability index for this project? (Round your answer to 2 decimal places.) Project profitability index 6. What is the project's internal rate of return? (Round your answer to nearest whole percent.) Project's internal rate of return 0 8. What is the project's simple rate of return for each of the five years? (Round your answer to 2 decimal places.) Simple rate of return
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