Required: 1. Which item(s) in the income statement shown above will not affect cash flows? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Sales

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Subject : Accounting

 

 

Cardinal Company is considering a five-year project that would
require a $2,945,000 investment in equipment with a useful life
of five years and no salvage value. The company's discount
rate is 18%. 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
Sales
Variable expenses
$ 754,000
589,000
Required:
1. Which item(s) in the income statement shown above will not
affect cash flows? (You may select more than one answer. Single
click the box with the question mark to produce a check mark for
a correct answer and double click the box with the question
mark to empty the box for a wrong answer. Any boxes left with a
question mark will be automatically graded as incorrect.)
$ 2,873,000
1,019,000
1,854,000
Depreciation expense
1,343 000
$ 511,000
Advertising, salaries, and other fixed out-of-pocket costs expenses
Transcribed Image Text:Cardinal Company is considering a five-year project that would require a $2,945,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 18%. 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 Sales Variable expenses $ 754,000 589,000 Required: 1. Which item(s) in the income statement shown above will not affect cash flows? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) $ 2,873,000 1,019,000 1,854,000 Depreciation expense 1,343 000 $ 511,000 Advertising, salaries, and other fixed out-of-pocket costs expenses
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