Question: Cardinal Company is considering a project that would require a $2, 815,000 investment in equipment with a useful life of five years. At the end

Cardinal Company is considering a project that would require a $2, 815,000 investment in equipment with a useful life of five years. At the end of five years, the project would terminate and the equipment would be sold for its salvage value of $400,000. The company's discount rate is 16%. The project would provide net operating income each year as follows: 2. What are the project's annual net cash inflows? 3. What is the present value of the projects annual net cash inflows? (Use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) 4. What is the present value of the equipments salvage value at the end d five years? (Use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) 5. What is the project's net present value? (Use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) 6. What is the project profitability index for this project? (Use the appropriate table to determine the discount factor(s) and final answer to 2 decimal places.)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
