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1-What is the project profitability index for this project? (Refer to the Exhibit 11B-1 and Exhibit 11B-2 attached in the end of this assignment, to determine the appropriate discount factor(s) using table. Round your final answer to the nearest dollar amount.)

2-What is the projects payback period? (Round your answer to 2 decimal places.)

3-What is the projects simple rate of return for each of the five years? (Round your answer to 2 decimal places. (i.e 0.1234 should be entered as 12.34%.))

4-If the companys discount rate was 16% instead of 14%, would you expect the project's net present value to be higher than, lower than, or the same?

Same B. Lower C. Higher

5-If the equipments salvage value was $500,000 instead of $300,000, would you expect the projects payback period to be higher than, lower than, or the same?

A. Lower B. Same C. Higher

6-If the equipments salvage value was $500,000 instead of $300,000, would you expect the project's net present value to be higher than, lower than, or the same?

A. Higher B. Same C. Lower

could you please solve each Q with explanations ans steps?

I already get soulations for 1 and 2 so could you please solve 3,4,5,6

here are the soulations for 1,2

(1) Profitability index (PI) = Present value (PV) of all cash inflows / Initial investment

= [$937,000 x PVIFA(14%, 5) + $300,000 x PVIF(14%, 5)] / $2,800,000

= [937,000 x 3.4331 + 300,000 x 0.5194] / 2,800,000

= (3,216,815 + 155,820) / 2,800,000

= 3,372,635 / 2,800,000

= 1.20

NOTE: Profitability index is not measured in dollars. It is an absolute value.

(2)

Payback period (PBP) is the time by when the project's future cash flows recover initial investment, i.e. time by when cumulative net cash flow is zero.

Year	Net Cash Flow ($)	Cumulative net cash flow ($)
0	-28,00,000	-28,00,000
1	9,37,000	-18,63,000
2	9,37,000	-9,26,000
3	9,37,000	11,000
4	9,37,000	9,48,000
5	12,37,000	21,85,000

PBP lies between years 2 and 3. So,

PBP = 2 + (Absolute value of cumulative net cash flow, year 2 / Net cash flow, year 3)

= 2 + (926,000 / 937,000)

= 2 + 0.99

= 2.99 years

Cardinal Company is considering a project that would require a $2,800,000 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 $300,000. The company's discount rate is 149%. The project would provide net operating income each year as follows is 14%. The project would provide net operating income each year as follows S 2,845,000 1,109,000 Sales Variable expenses 1,736,000 Contribution margin Fixed expenses: Advertising, salaries, and other 799,000 500,000 fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income 1,299,000 437,000

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