Cardinal Company is considering a project that would require a
$2,985,000 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:
Sales
$
2,737,000
Variable expenses
1,001,000
Contribution margin
1,736,000
Fixed expenses:
Advertising, salaries, and other
fixed...