Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. required information skip to question [the follo

Required information Skip to question [The following information applies to the questions displayed...

90.2K

Verified Solution

Question

Accounting

Required information

Skip to question

[The following information applies to the questions displayed below.]

Cardinal Company is considering a five-year project that would require a $2,945,000 investment in equipment with a useful life of five years and no salvage value. The companys discount rate is 18%. The project would provide net operating income in each of five years as follows:

Sales $ 2,873,000
Variable expenses 1,019,000
Contribution margin 1,854,000
Fixed expenses:
Advertising, salaries, and other out-of-pocket costs $ 754,000
Depreciation 589,000
Total fixed expenses 1,343,000
Net operating income $ 511,000

(Hint: Use Microsoft Excel to calculate the discount factor(s).)

8. If the companys discount rate was 20% instead of 18%, would you expect the project's net present value to be higher, lower, or the same?

multiple choice

  • Higher

  • Lower

  • Same

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

A particular fruit's weights are normally distributed, with a mean of 401 grams and a standard...

Statistics
Q

Digestive System Anatomy In order, name each organ and sphincter a piece of food travels through as...

Medical Sciences
Q

Sky Kitchens is the second largest airline caterer in the United States, providing nearly all the...

Basic Math
Q

Applied to Business Research Module Compose a literature review surrounding the debates on “The impact of an...

General Management
Q

Use the pattern in Pascal's triangle to find the probability of getting 2 heads when...

Basic Math
Q

199 18 17 16 15 12 11 18 9 8 6 2 1 1 1...

Calculus
Q

1 point Suppose x c e a Verify that x cje c e4 is a...

Calculus
Q

A sequence is defined recursively by the given formulas. Find the first five terms of...

Algebra
Q

Four reasons why manufacturers are increasing in spending on sales promotion

Accounting
Q

What is the journal entry to set up the petty cash fund to $200? Select...

Accounting
Q

P9.3 Unit Replacement Cost Product Unit Cost $10 Quantity Unit Selling Price $16 $12 1,000...

Accounting
Q

3 Your company sponsors a 401(k) plan into which you deposit 12 percent of your...

Finance