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Cardinal Company is considering a five-year project requiring a $2,975,000 investment in equipment with a...

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Accounting

Cardinal Company is considering a five-year project requiring a $2,975,000 investment in equipment with a useful life of five years and no salvage value. The companys discount rate is 14%. The project would provide net operating income in each of five years as follows:
Sales $ 2,735,000
Variable expenses 1,000,000
Contribution margin 1,735,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs $ 735,000
Depreciation 595,000
Total fixed expenses 1,330,000
Net operating income $ 405,000
Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using table.
2. What are the projects annual net cash inflows?

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