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Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expenses ch actually turned out to be 45%. What was the project's actual net present value? (Negative amount should be indicate us sign. Round intermediate calculations and final answer to the nearest whole dollar amount.) Answer is complete but not entirely correct. present value 283 652

Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expenses ch actually turned out to be 45%. What was the project's actual net present value? (Negative amount should be indicate us sign. Round intermediate calculations and final answer to the nearest whole dollar amount.) Answer is complete but not entirely correct. present value 283 652

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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[The following information applies to the questions displayed below.] Cardinal Company is considering a five-year project that would require a $2,812,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 16%. 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 $ 798,000 562,400 Depreciation Total fixed expenses Net operating income. Click here to view Exhibit 128-1 and Exhibit 128-2, to determine the appropriate discount factor(s) using table. Answer is complete but not entirely correct. Net present value 283,653 x $ 2,855,000 1,010,000 1,845,000 $ Foundational 12-13 (Algo) 13. 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 45%. What was the project's actual net present value? (Negative amount should be indicated by a minus sign. Round intermediate calculations and final answer to the nearest whole dollar amount.) 1,360,400 $ 484,600
Transcribed Image Text:[The following information applies to the questions displayed below.] Cardinal Company is considering a five-year project that would require a $2,812,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 16%. 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 $ 798,000 562,400 Depreciation Total fixed expenses Net operating income. Click here to view Exhibit 128-1 and Exhibit 128-2, to determine the appropriate discount factor(s) using table. Answer is complete but not entirely correct. Net present value 283,653 x $ 2,855,000 1,010,000 1,845,000 $ Foundational 12-13 (Algo) 13. 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 45%. What was the project's actual net present value? (Negative amount should be indicated by a minus sign. Round intermediate calculations and final answer to the nearest whole dollar amount.) 1,360,400 $ 484,600
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