Chapter 12, Problem 1F15

Cardinal Company is considering a five-year project that would require a $2,975,000 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 wars as follows:

Required:
(Answer each question by referring to the original data unless instructed otherwise.)
1. Which item(s) in the income statement shown above will not affect cash flows?