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Cardinal Company is considering a project that would require a $2,792,000 investment in equipment with a useful life of five years. At the end of five years, the project would terminate and the equipment would be sold for its salvage value of $400,000. The company's discount rate is 14%. The project would provide net operating income each year as follows: 2,875,000 Sales Variable expenses 1,124,000 1,751,000 Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation $ 721,000 478,400 Total fixed expenses 1,199,400 Net operating income $ 551,600 EXHIBIT 118-1 Present Value of S1: +7 Periods 496 59 69 7% 9% 10% 119 124 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 1 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.828 0.820 0.813 0.806 0.800 2 0.025 0.007 0.890 0.873 0.857 0.842 0.826 0.812 0.797 0.783 0.769 0.756 0.743 0.731 0.718 0.706 0.694 0.683 0.672 0.661 0.650 0.640 3 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.658 0.641 0.624 0.609 0.593 0.579 0.564 0.551 0.537 0.524 0.512 4 0.855 0.823 0.792 0.763 0.735 0.708 0.683 0.659 0.636 0.613 0.592 0.572 0.552 0.534 0.516 0.499 0.482 0.467 0.451 0.437 0.423 0.410 5 0.822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0.519 0.497 0.476 0.456 0.437 0.419 0.402 0.386 0.370 0.355 0.341 0.328 6 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.535 0.507 0.480 0.456 0.432 0.410 0.390 0.370 0.352 0.335 0.319 0.303 0.289 0.275 0.262 7 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0.354 0.333 0.314 0.296 0.279 0.263 0.249 0.235 0.222 0.210 8 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.305 0.285 0.266 0.249 0.233 0.218 0.204 0.191 0.179 0.168 9 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0.194 0.180 0.167 0.155 0.144 0.134 10 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.352 0.322 0295 0.270 0.247 0.227 0.208 0.191 0.176 0.162 0.149 0.137 0.126 0.116 0.107 11 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.317 0.287 0.261 0.237 0.215 0.195 0.178 0.162 0.148 0.135 0.123 0.112 0.103 0.094 0.086 12 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0 286 0.257 0231 0.20 0.187 0.168 0.152 0.137 0.124 0.112 0.102 0.092 0.083 0.076 0.069 13 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.258 0.229 0.204 0.182 0.163 0.145 0.130 0.116 0.104 0.093 0.084 0.075 0.068 0.061 0.055 14 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.232 0.206 0.181 0.160 0.141 0.125 0.111 0.099 0.088 0.078 0.069 0.062 0.055 0.049 0.044 15 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0209 0.183 0.160 0.140 0.123 0.108 0.095 0.084 0.074 0.065 0.057 0.051 0.045 0.040 0.035 16 0.534 0.458 0.394 0.330 0.292 0.252 0.218 0.188 0.163 0.141 0.123 0.107 0.093 0.081 0.071 0.062 0.054 0.047 0.042 0.036 0.032 0.028 17 0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.170 0.146 0.125 0.108 0.003 0.000 0.000 0.000 0.052 0.045 0.030 0.034 0.030 0.025 0.023 18 0.494 0.416 0.350 0.296 0.250 0.212 0.180 0.153 0.130 0.111 0.005 0.081 0.069 0.059 0.051 0.044 0.038 0.032 0.028 0.024 0.021 0.018 19 0.475 0.396 0.331 0.277 0.232 0.194 0.164 0.138 0.116 0.098 0.083 0.070 0.060 0.051 0.043 0.037 0.031 0.027 0.023 0.020 0.017 0.014 20 0.456 0.377 0.312 0.258 0.215 0.178 0.140 0.124 0.104 0.087 0.073 0.061 0.051 0.043 0.037 0.031 0.026 0.022 0.019 0.016 0.014 0.012 21 0.430 0.350 0.204 0.242 0.190 0.164 0.135 0.112 0.003 0.077 0.064 0.053 0.044 0.037 0.031 0.025 0.022 0.018 0.015 0.013 0.011 0.000 22 0.422 0.342 0.278 0.226 0.184 0.150 0.123 0.101 0.083 0.068 0.056 0.046 0.038 0.032 0.026 0.022 0.018 0.015 0.013 0.011 0.009 0.007 23 0.406 0.326 0.262 0.211 0.170 0.138 0.112 0.001 0.074 0.060 0.049 0.040 0.033 0.027 0.022 0.018 0.015 0.012 0.010 0.009 0.007 0.006 24 0.390 0.310 0.247 0.197 0.158 0.126 0.102 0.082 0.066 0.053 0.043 0.035 0.028 0.023 0.019 0.015 0.013 0.010 0.008 0.007 0.006 0.005 25 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.074 0.059 0.047 0.038 0.030 0.024 0.020 0.016 0.013 0.010 0.000 0.007 0.006 0.005 0.004 26 0.361 0.281 0.220 0.172 0.135 0.106 0.084 0.066 0.053 0.042 0.033 0.026 0.021 0.017 0.014 0.011 0.000 0.007 0.006 0.005 0.004 0.003 27 0.347 0.268 0.207 0.161 0.125 0.098 0.076 0.060 0.047 0.037 0.029 0.023 0.018 0.014 0.011 0.000 0.007 0.006 0.005 0.004 0.003 0.002 28 0.333 0.256 0.196 0.150 0.116 0.090 0.069 0.054 0.042 0.033 0.026 0.020 0.016 0.012 0.010 0.008 0.006 0.005 0.004 0.003 0.002 0.002 29 0.321 0.243 0.185 0.141 0.107 0.082 0.063 0.048 0.037 0.029 0.022 0.017 0.014 0.011 0.008 0.006 0.005 0.004 0.003 0.002 0.002 0.002 30 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.044 0.033 0.026 0.020 0.015 0.012 0.009 0.007 0.005 0.004 0.003 0.003 0.002 0.002 0.001 40 0.208 0.142 0.097 0.067 0.046 0.032 0.022 0.015 0.011 0.008 0.005 0.004 0.003 0.002 0.001 0.001 0.001 0.000 0.000 0.000 0.000 0.000 EXHIBIT 118-2 Present Value of an Annuity of $1 in Arrears: Periods 49 5% 6 T 8% 99 10% 11 12 139 14 15% 19 17 18% 19 20219 23924% 25% 0.962 0.952 0.943 0.935 0.926 0.9170.00 0.001 093 0.885 0.4 0.070 0.2 0.6 047 0.40 0.33 0.826 0.B20 0.813 0.HD6 0.00 2 1.BB6 1.59 1.83 1.800 1.783 1.750 1.736 1.713 1.600 1.0M 1.647 1.626 1.805 1.585 1.80 1.547 1.828 1.500 1.422 1.474 1.457 1.440 3 2.775 2723 273 2.624 2.577 2631 2.4B72444 2402 2361 2.32 2263 2246 2210 2.174 2.140 2.106 2.074 2.02 2011 1.98] 1.952 4 3.630 3.546 3.46 3.387 3.312 3.240 3.170 3.102 3.037 2.974 2.914 2855 2.790 2.743 2.600 2.00 2.580 2.540 2.4994 2449 2.404 2362 5 4.452 42 4.212 4.100 3.993 3.90 3.791 3.696 3.605 3.517 3.433 3352 3274 3.19 3.127 3.058 2.991 2926 2.864 2.803 2.745 2.699 6 5.242 5.076 4.917 4.767 4.623 4.46 4.35 4.231 4.111 3.99 3.8 3.74 35 3.50 3.4% 3.410 3.326 3246 3167 3.092 3.020 2.951 5.00 5.796 5. 52 5.00 5.206 5.00 4,868 4.712 4.564 4.423 4.29% 4.168 4.099 3.3.812 3.06 3.66 3.500 3.416 3327 3.22 3.161 6. .463 610 5.971 574/ 5.535 5.35 5.146 4.90 4.79 4.69 4.47 4344 4207 4.08 3.954 3.37 3.78 3.619 3518 3.21 3.32 7.435 7.108 6.BDC .515 2447 5. 5.78 5.537 5.30 514.94% 4.772 4.07 4.451 4.303 4.163 4.031 3.965 3.76 3673 3.56 3.463 10 B.171 772 7.360 7024 B710 6.418 6.145 5.89 5.650 5.426 5.216 5.019 48 4.659 4.494 4.39 4.192 4.054 3.923 3799 3.882 3.571 11 8.760 306 7 BB 7.49 7-1230 6.BD5 6.46 6207 5.99 5.07 5.43 5.234 5.00 4.836 4.656 4.496 4.27 4.1T 4.035 3.902 3.76 3.656 12 9.385 8.863 8.384 7.943 7.536 7.161 6.814 8.492 6.194 5.918 5660 5.421 5.197 4.988 4.793 4.611 4.439 4278 4.127 3.995 3851 3.25 13 9.986 0.394 8.853 8.358 7.904 7.487 7.103 6.750 6.424 6.122 5.842 5.563 5342 5.118 4.910 4.715 4.533 4.362 4203 4.0653 3.912 3.780 14 10.562 9.899 295 746 4244 7.76 7.367,062 6,620 0.302 002 5724 5.4 6229 5.000 4.HONE 4.611 442 4285 4.108 3.962 3.24 16 11.118 10.380 12 100 8.559 8.061 7.606 7.101 6.811 0.42.142 5.947 5.55 5.324 5.002 4.876 4.65 4.40 4.315 4.163 4.001 3.859 18 11.652 10.830 10.10% 9.4478651 8.313 74 7.379 6.074 0 004 6.265 5.054 5.8M 5.405 5.1 4.006 4730 4.5% 4.367 4.100 4.033 3.87 17 12.16 11.274 10.47 63 9.122 8.544 8.022 7.50 120 0.79 373 047 5.749 5.45 5.22 4.00 46 4.575 4.361 4.219 4,069 3.9 10 1 12.6511.690 10.26 10.050 9.372 8.7% 8.201702 7260 6.840 6.467 6.128 5.818 5.5.34 5.23 5.0833 4.812 4.608 4.419 4.243 4.060 3.928 11 13.134 12.085 11.150 10.3% 604 8.950 6.36% 7.439 7366 6039 6.650 6.190 5.077 5.54 5.316 5.070 443 4.65 4.42 4203 4007 3.942 13.590 12.4 11.470 10.594 9.818 9.120 0.514 7.03 7.440 705 6.623 6.250 5.00 5.020 5.353 5.101 4.870 4.657 4.40 42 4.110 3.054 21 14.029 12 1 11 AM 10. KB 10.01 9.22 049 0.07% 7.02 102 8.0.312 5.00 SARS 5.234 5.127 4.1991 75 4.47 42 4.12] 3.982 14.45] 13.19 12.042 11.001 10.201 9.442 0.7 0.176 7045 7.170 6.743 6.350 0.011 5.06 5.4 10 5. 140 4.00 4,000 44 4.2302 4.130 3.90 23 14.57 13.48 12.30 11.2TP 10.2371 9.50 0.983 0.200 7.71 7200 6.792 6.300 6.044 5.23 5.42 5.167 4. 4.70 4490 4.311 4.137 3.076 24 15.247 13.TING 12. SO 11.49 10.520 9.707 0.0% 0.34H 7.74 7263 6.835 6.434 0.00 5.74% 5.451 5.182 4.037 4.7 13 4 B07 4.318 4.143 3.961 5 15.62 14.094 2.78 11.654 10.875 9.23 0.0 0.422 7.043 7.320 0.873 6.4M 0.007 5.766 5.47 5. 106 4.4MB 4.21 4.514 4.323 4.147 3.985 26 15.963 14.35 13.00 11.826 10.010 0.00 0.161 8.480 7.90 7.32 4.9806 6.40] 6.116 5.73 5.480 520 4.00 4.720 4520 4.328 4.151 3.988 27 16.320 14.643 13.211 11.987 10.036 10.027 0.237 8.548 7.04] 7.400 8.935 6.514 6.150 5.70M 5.42 5.215 4.04 44 4.524 4.32 4.164 3.000 16.663 14.00 13.406 12.137 11.061 10.116 0.307 6.802 74 7.44] 6.961 0.534 6.1 5.010 5.50 5.20 4.070 40 4528 4.264.17 1.9MB 29 16.984 15.141 13.591 12.278 11.168 10.196 0370 4.80 8.02 7.470 6. OHO 6.551 6.1% 5.20 5.5 10 5.229 4.075 4.749 4.531 4.347 4.150 3. WOM ( 30 17.202 16.32 13.766 12.400 11.20 10.274 0.427 8.004 10.06% 7400 7000 16.6MB 2.1P 5.82 85178.28% 4.90 4.746 4.574 4.230 4.160 3.06 4 10.T99 17.169 16.04 13.EP 11.25 10.767 0.70 8.161 4.244 7.0M 7.106 0.042 6.234 BB! B.B48 5.26 4.007 4.TWD 4.54 4.247 4.166 3.PNG Click here to view Exhibit 11B-2, to determine the appropriate discount factor(s) using table. 3. What is the present value of the project's annual net cash inflows? (Use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) Present value Required information value 1.00 points Click here to view Exhibit 118-1, to determine the appropriate discount factor(s) using table. 4. What is the present value of the equipment's salvage value at the end of five years? (Use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) Present value Required information value: 1.00 points Click here to view Exhibit 11B-1 and Exhibit 11B-2. to determine the appropriate discount factor(s) using tables. 5. What is the project's net present value? (Use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) Net present value Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables. 6. What is the project profitability index for this project? (Use the appropriate table to determine the discount factor(s) and final answer to 2 decimal places.) Project profitability index

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