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 $2,955,000 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 $ 750,000 591,000 $ 2,865,000 1,015,000 1,850,000 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. Net present value 1,341,000 $509,000 Foundational 12-4 (Algo) 4. What is the project's net present value? (Round final answer to the nearest whole dollar amount.)
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 $2,955,000 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 $ 750,000 591,000 $ 2,865,000 1,015,000 1,850,000 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. Net present value 1,341,000 $509,000 Foundational 12-4 (Algo) 4. What is the project's net present value? (Round final answer to the nearest whole dollar amount.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Haresh
![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 $2,955,000 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
$ 750,000
591,000
$ 2,865,000
1,015, 000
1,850,000
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.
Net present value
1,341,000
$509,000
Foundational 12-4 (Algo)
4. What is the project's net present value? (Round final answer to the nearest whole dollar amount.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb2ee9549-8b17-4a80-a2e9-78a28be22b39%2F99ae595c-fca0-49eb-916e-0ca380a7340c%2Fs0znnkw_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 $2,955,000 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
$ 750,000
591,000
$ 2,865,000
1,015, 000
1,850,000
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.
Net present value
1,341,000
$509,000
Foundational 12-4 (Algo)
4. What is the project's net present value? (Round final answer to the nearest whole dollar amount.)
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