14. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio, which actually turned out to be 50%. What was the project's actual payback period? (Round your answer to 2 decimal places.) Payback period years
14. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio, which actually turned out to be 50%. What was the project's actual payback period? (Round your answer to 2 decimal places.) Payback period years
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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i need help with these two accounting 2102 questions and can you show the work for them please
![Required information
The Foundational 15 (Algo) [LO12-1, LO12-2, LO12-3, LO12-5, LO12-6]
[The following information applies to the questions displayed below.]
Cardinal Company is considering a five-year project that would require a $2,805,000 Investment in equipment with a
useful life of five years and no salvage value. The company's discount rate is 14%. The project would provide net operating
income in each of five years as follows:
Sales
Variable expenses
Contribution margin
Fixed expenses:
Advertising, salaries, and other fixed
out-of-pocket costs
Depreciation
Total fixed expenses
Net operating income
Foundational 12-14 (Algo)
Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table.
Payback period
52
$ 642,000
561,000
14. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio,
which actually turned out to be 50%. What was the project's actual payback period? (Round your answer to 2 decimal places.)
years
F3
$ 2,741,000
1,125,000
1,616,000
1,203,000
$ 413,000
F4
< Prev
F5
14 15
of 15
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F7](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F000ebe7d-18bd-48ed-9e93-76a69cfcf470%2F3108e1e3-4bd9-49bf-8119-61b2e7250ddb%2Fh85zf77_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
The Foundational 15 (Algo) [LO12-1, LO12-2, LO12-3, LO12-5, LO12-6]
[The following information applies to the questions displayed below.]
Cardinal Company is considering a five-year project that would require a $2,805,000 Investment in equipment with a
useful life of five years and no salvage value. The company's discount rate is 14%. The project would provide net operating
income in each of five years as follows:
Sales
Variable expenses
Contribution margin
Fixed expenses:
Advertising, salaries, and other fixed
out-of-pocket costs
Depreciation
Total fixed expenses
Net operating income
Foundational 12-14 (Algo)
Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table.
Payback period
52
$ 642,000
561,000
14. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio,
which actually turned out to be 50%. What was the project's actual payback period? (Round your answer to 2 decimal places.)
years
F3
$ 2,741,000
1,125,000
1,616,000
1,203,000
$ 413,000
F4
< Prev
F5
14 15
of 15
MacBook Pro
F6
Next >
F7
![Required information
The Foundational 15 (Algo) [LO12-1, LO12-2, LO12-3, LO12-5, LO12-6]
[The following information applies to the questions displayed below.]
Cardinal Company is considering a five-year project that would require a $2,805,000 investment in equipment with a
useful life of five years and no salvage value. The company's discount rate is 14%. The project would provide net operating
Income in each of five years as follows:
Sales
Variable expenses
Contribution margin
Fixed expenses:
Advertising, salaries, and other fixed
out-of-pocket costs
Simple rate of return
$ 642,000
561,000
Depreciation
Total fixed expenses
1,203,000
Net operating income
$ 413,000
Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table.
%
Foundational 12-15 (Algo)
15. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio,
which actually turned out to be 50%. What was the project's actual simple rate of return? (Round your answer to 2 decimal places.)
F3
$ 2,741,000
1,125,000
1,616,000
F4
Saved
< Prev
F5
8
15 of 15
www
www
MacBook Pro
F6
Next >
F7](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F000ebe7d-18bd-48ed-9e93-76a69cfcf470%2F3108e1e3-4bd9-49bf-8119-61b2e7250ddb%2Fs7xiofd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
The Foundational 15 (Algo) [LO12-1, LO12-2, LO12-3, LO12-5, LO12-6]
[The following information applies to the questions displayed below.]
Cardinal Company is considering a five-year project that would require a $2,805,000 investment in equipment with a
useful life of five years and no salvage value. The company's discount rate is 14%. The project would provide net operating
Income in each of five years as follows:
Sales
Variable expenses
Contribution margin
Fixed expenses:
Advertising, salaries, and other fixed
out-of-pocket costs
Simple rate of return
$ 642,000
561,000
Depreciation
Total fixed expenses
1,203,000
Net operating income
$ 413,000
Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table.
%
Foundational 12-15 (Algo)
15. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio,
which actually turned out to be 50%. What was the project's actual simple rate of return? (Round your answer to 2 decimal places.)
F3
$ 2,741,000
1,125,000
1,616,000
F4
Saved
< Prev
F5
8
15 of 15
www
www
MacBook Pro
F6
Next >
F7
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