Contribution margin income statement
Sales | 2741000 |
Variable cost | 1370500 |
Contribution margin | 1370500 |
Fixed cost | 1203000 |
Operating income | 167500 |
Annual Cash flow = 167500+561000 = 728500
14) Payback period = 2805000/728500 = 3.85 years
15) Simple rate of return = 167500/2805000 = 5.97%
Cardinal Company is considering a five-year project that would require a $2,805,000 investment in equipment with...
Cardinal Company is considering a five-year project that would require a $2,805,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 14%. The project would provide net operating income in each of five years as follows: $2,741,000 1,125,000 1,616,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income $642,000 561,000 1,203,000 $ 413,000 Click here to view Exhibit...
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: 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 591,000 Total fixed expenses 1,344,000 Net operating income $ 509,000 Click here to...
CARDINAL COMPANY IS CONSIDERING A FIVE-YEAR PROJECT THAT WOULD REQUIRE A $2,975,000 INVESTMENT IN EQUIPMENT WITH A USEFUL LIFE OF YEARS AND NO SALVAGE VALUE. THE COMPANY'S DISCOUNT RATE IS 14%. THE PROJECT WOULD PROVIDE NET OPERATING INCOME IN EACH OF THE FIVE YEARS AS FOLLOWS: SALES $2,735,000 VARIABLE EXPENSES 1,000,000 CONTRIBUTION MARGIN $1,735,000 FIXED EXPENSES: ADVERTISING, SALARIES, AND OTHER FIXED OUT OF POCKET COSTS $735,000 DEPRECIATION $595,000 TOTAL FIXED EXPENSES $1,330,000 NET OPERATING INCOME $405,000 1. ASSUME A...
Cardinal Company is considering a five-year project that would require a $2,755,000 investment in equipment with a useful life of five years and no salvage value. The company’s discount rate is 14%. The project would provide net operating income in each of five years as follows: Sales $ 2,875,000 Variable expenses 1,124,000 Contribution margin 1,751,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs $ 721,000 Depreciation 551,000 Total fixed expenses 1,272,000 Net operating income $ 479,000 Click here to...
Cardinal Company is considering a five-year project that would require a $2,975,000 investment in equipment with a useful life of years and no salvage value. The company's discount rate is 14%. The project would provide net operating income each of the five years as folllows: Sales $2,735,000 Variable Expenses 1,000,000 Contribution Margin $1,735,000 Fixed Expenses: Advertising , salaries, and other fixed out of pocket costs $735,000 Depreciation $995,000 Total Fixed expenses $1,330,000 Net Operating Income $405,000...
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: $ 2,746, eee 1,126, eee 1,620,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income $ 615, eee 583,000 1,198,000 422,000 Click...
Cardinal Company is considering a project that would require a $2,800,000 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 14%. The project would provide net operating income each year as follows: Sales $ 2,845,000 Variable expenses 1,109,000 Contribution margin 1,736,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs $ 799,000...
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...
Cardinal Company is considering a project that would require a $2,500,000 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 company’s discount rate is 12%. The project would provide net operating income each year as follows: Sales $ 2,853,000 Variable expenses 1,200,000 Contribution margin 1,653,000 Fixed expenses: Advertising, salaries, and other fixed...
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...