Paper , Order, or Assignment Requirements

Cardinal Company is considering a project that would require a $2,875,000 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 $300,000. The company’s discount rate is 16%. The project would provide net operating income each year as follows:

Sales $ 2,871,000
Variable expenses 1,018,000

Contribution margin 1,853,000
Fixed expenses:
Advertising, salaries, and other
fixed out-of-pocket costs $ 753,000
Depreciation 515,000

Total fixed expenses 1,268,000

Net operating income $ 585,000

What is the project’s payback period? (Round your answer to 2 decimal places.)
What is the project’s simple rate of return for each of the five years? (Round your answer to 2 decimal places. (i.e 0.1234 should be entered as 12.34.))
If the equipment’s salvage value was $500,000 instead of $300,000, what would be the project’s simple rate of return? (Round your answer to 2 decimal places. (i.e 0.1234 should be entered as 12.34.))
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 project’s actual net present value?
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 project’s actual payback period?
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 project’s actual simple rate of return?