Cardinal Company is considering a project that would require a $2,782,000 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 $200,000. The companys discount rate is 18%. The project would provide net operating income each year as follows:

Sales

$

2,873,000

Variable expenses

1,019,000

Contribution margin

1,854,000

Fixed expenses:

Advertising, salaries, and other fixed out-of-pocket costs

$

754,000

Depreciation

516,400

Total fixed expenses

1,270,400

Net operating income

$

583,600

Previous answers:

projects annual net cash inflows- 1,100,000

present value of net cash inflows- 3,439,700

present value of salvage value at the end of 5 years- 87,400

projects net present value- 745,100

project payback period- 2.53 years

Question:

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.) Project profitability index=

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. Use the appropriate table to determine the discount factor(s), Round other intermediate calculations and final answer to the nearest whole dollar.)

Net present value=

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.)

Payback period ______ years

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. (i.e 0.1234 should be entered as 12.34.))
	Simple rate of return= _____%

Information needed for questions 6 and 13.

Present value of $1 ----- http://lectures.mhhe.com/connect/0078025419/Exhibit/Exhibit%2011B-1.JPG

Present value of annuity of $1 in arrears ---- http://lectures.mhhe.com/connect/0078025419/Exhibit/Exhibit%2011B-2.JPG

****note: When using the tables above could you please only use the exact numbers in the table? I have gotten multiple wrong answers back because people keep using the wrong numbers. They are similar to the ones in the table, but they aren't exact so it's resulting in a wrong answer every time. Thank you!!