Cardinal Company is considering a five-year project that would require a $2,765,000 investment in equipment with a useful life of five years and no salvage value. The companys discount rate is 14%. The project would provide net operating income in each of five years as follows:

Sales		$ 2,851,000
Variable expenses		1,150,000
Contribution margin		1,701,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs	$ 670,000
Depreciation	553,000
Total fixed expenses		1,223,000
Net operating income		$ 478,000

9. If the companys discount rate was 16% instead of 14%, would you expect the project's net present value to be higher, lower, or the same?

10. If the equipment had a salvage value of $300,000 at the end of five years, would you expect the projects payback period to be higher, lower, or the same?

11. If the equipment had a salvage value of $300,000 at the end of five years, would you expect the project's net present value to be higher, lower, or the same?

12. If the equipment had a salvage value of $300,000 at the end of five years, would you expect the projects simple rate of return to be higher, lower, or the same?