The Foundational 15(Algo)[LO12-1, LO12-2, LO12-3, LO12-5, LO12-6] Skip to question [The following information...

90.2K

Verified Solution

Question

Accounting

The Foundational 15(Algo)[LO12-1, LO12-2, LO12-3, LO12-5, LO12-6]
Skip to question
[The following information applies to the questions displayed below.]
Cardinal Company is considering a five-year project that would require a $2,500,000 investment in equipment with a useful life of five years and no salvage value. The companys discount rate is 12%. The project would provide net operating income in each of five years as follows:
Sales $ 2,853,000
Variable expenses 1,200,000
Contribution margin 1,653,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs $ 790,000
Depreciation 500,000
Total fixed expenses 1,290,000
Net operating income $ 363,000
3. What is the present value of the projects annual net cash inflows? (Round your final answer to the nearest whole dollar amount)
4. What is the projects net present value? (Round final answer to the nearest whole dollar amount.)
5. What is the projects internal rate of return?

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