Variable expenses = Sales * Variable expense ratio
= $2,849,000 * 45%
= $1,282,050
Sales | $2,849,000 |
Variable expenses | ($1,282,050) |
Contribution margin | $1,566,950 |
Fixed expenses | ($1,302,000) |
Net operating income | $264,950 |
Annual cash inflows = Net operating income + Depreciation
= $264,950 + $550,000
= $814,950
Payback period = Investment / Annual cash inflows
= $2,750,000 / $814,950
= 3.37 years
Check my work Required information [The following information applies to the questions displayed below.) Part 14...
Check my work Required information [The following information applies to the questions displayed below.) Part 14 of 15 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 company's discount rate is 18%. The project would provide net operating income in each of five years as follows: 0.66 $2,849,000 1.122.000 1, 727,000 Variable expenses Contribution margin Fixed expenses Advertising, salaries, and other fixed...
Check my work 14 Required information [The following information applies to the questions displayed below] Part 14 of 15 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 company's discount rate is 18%. The project would provide net operating income in each of five years as follows: 0.66 points $2,849,000 1,122,000 1,727,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and...
. What is the project’s payback period? (Round your answer to 2 decimal places.) Required information [The following information applies to the questions displayed below.) 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 company's discount rate is 18%. The project would provide net operating income in each of five years as follows: $ 2,849,000 1, 122,000 1,727,000 Sales Variable expenses Contribution...
Required information [The following information applies to the questions displayed below.] Cardinal Company is considering a five-year project that would require a $2,955,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 16%. The project would provide net operating income in each of five years as follows: $ 2,871,000 1,018,000 1,853,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net...
Required information [The following information applies to the questions displayed below.] Cardinal Company is considering a five-year project that would require a $2,870,000 investment in equipment with a useful life of five years and no salvage value. The company’s discount rate is 12%. The project would provide net operating income in each of five years as follows: Sales $ 2,861,000 Variable expenses 1,101,000 Contribution margin 1,760,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs $ 705,000 Depreciation 574,000 Total...
Required information [The following information applies to the questions displayed below.] Cardinal Company is considering a five-year project that would require a $2,915,000 investment in equipment with a useful life of five years and no salvage value. The company’s discount rate is 12%. The project would provide net operating income in each of five years as follows: Sales $ 2,746,000 Variable expenses 1,126,000 Contribution margin 1,620,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs $ 615,000 Depreciation 583,000 Total...
Also Answer 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 project’s actual simple rate of return? 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 company's discount rate is 18%. The project would provide net operating income in each of...
Required information [The following information applies to the questions displayed below.) Cardinal Company is considering a five-year project that would require a $2,812,000 Investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 16%. The project would provide net operating income in each of five years as follows: $2,855,000 1,010,000 1,845,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating...
Required information [The following information applies to the questions displayed below.) Cardinal Company is considering a five-year project that would require a $2,955,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 16%. The project would provide net operating income in each of five years as follows: $ 2,871,000 1,018,000 1,853,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net...
Required information The following information applies to the questions displayed below.] Cardinal Company is considering a five-year project that would require a $2,810,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 16%. The project would provide net operating income in each of five years as follows: $2,847,000 1,121,000 1,726,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other 782,000 562,000 fixed out-of-pocket costs Depreciation 1,344,000 $ 382,000...