You are the CEO of Cardinal Company (a small handheld technology firm) and have just been briefed on a promising new product with projected cash flows detailed below. Discuss your assessment of this project's viability and profitability. Explain the principles of evaluating cash inflows and outflows. Calculate payback period, total return on investment, internal rate of return, and net present value. State any assumptions (i.e. discount rate). Explain your reasoning behind those assumptions. Year Capital Expenditure Revenue S 2016 $18,000,000 $3,000,000 $4,000,000 $6,500,000 $7,500,000 $3,500,000 $7,500,000 $8,000,000 $1,500,000 $8,500,000 $9,000,000 $2,000,000 $9,500,000 2017 2018 2019 2020 2021 2022 2023 2024 2025

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3. You are the CEO of Cardinal Company (a small handheld technology firm) and have
just been briefed on a promising new product with projected cash flows detailed
below. Discuss your assessment of this project's viability and profitability. Explain
the principles of evaluating cash inflows and outflows. Calculate payback period,
total return on investment, internal rate of return, and net present value. State any
assumptions (i.e. discount rate). Explain your reasoning behind those assumptions.
Capital
Expenditure
Year
Revenue
2016
$18,000,000
2017
$3,000,000
$4,000,000
$6,500,000
$7,500,000 $3,500,000
$7,500,000
$8,000,000 $1,500,000
$8,500,000
$9,000,000 $2,000,000
$9,500,000
2018
2019
2020
2021
2022
2023
2024
2025
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Transcribed Image Text:3. You are the CEO of Cardinal Company (a small handheld technology firm) and have just been briefed on a promising new product with projected cash flows detailed below. Discuss your assessment of this project's viability and profitability. Explain the principles of evaluating cash inflows and outflows. Calculate payback period, total return on investment, internal rate of return, and net present value. State any assumptions (i.e. discount rate). Explain your reasoning behind those assumptions. Capital Expenditure Year Revenue 2016 $18,000,000 2017 $3,000,000 $4,000,000 $6,500,000 $7,500,000 $3,500,000 $7,500,000 $8,000,000 $1,500,000 $8,500,000 $9,000,000 $2,000,000 $9,500,000 2018 2019 2020 2021 2022 2023 2024 2025 Activate Go to Setti
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