Cardinal Company is considering a five-year project that would require a $2,750,000 investment in equipment with a useful life of five years and no salvage value. The companys discount rate is 18%. The project would provide net operating income in each of five years as follows:

Sales			$	2,849,000
Variable expenses				1,122,000
Contribution margin				1,727,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs	$	752,000
Depreciation		550,000
Total fixed expenses				1,302,000
Net operating income			$	425,000

Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using table.

7. What is the projects payback period? (Round your answer to 2 decimal places.)

8. What is the projects simple rate of return for each of the five years? (Round your answer to 2 decimal places.)

9. If the companys discount rate was 20% instead of 18%, would you expect the project's net present value to be higher, lower, or the same?

13. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio, which actually turned out to be 45%. What was the projects actual net present value? (Negative amount should be indicated by a minus sign. Round intermediate calculations and final answer to the nearest whole dollar amount.)

14. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio, which actually turned out to be 45%. What was the projects actual payback period? (Round your answer to 2 decimal places.)

15. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio, which actually turned out to be 45%. What was the projects actual simple rate of return? (Round your answer to 2 decimal places.)