Simmons company is a merchandiser with multiple store locations. one of its store managers is considering a shift in her store's product mix in anticipation of a strengthening economy. her store would invest exist800,000 in more expensive merchandise (an increase in its working capital) with the expectation that it would increase annual sales and variable expenses by exist400,000 and exist250,000, respectively for three years. at the end of the three-year period, the store manager believes that the economic surge will subside: therefore, she will release the additional investment in working capital. the store manager's pay raises are largely determined by her store's return on investment (roi), which has exceeded 22% each of the last three years. 1. assuming the company's discount rate is 16%, calculate the net present value of the store manager's investment opportunity. 2. calculate the annual margin, turnover, and return on investment (roi) provided by the store manager's investment opportunity. 3. assuming that the company's minimum required rate of return is 16%, calculate the residual income earned by the store manager's investment opportunity for each of years 1 through 3. 4. do you think the store manager would choose to pursue this investment opportunity? do you think the company would want the store manager to pursue it?

Cardinal company is considering a project that would require a $2,725,000 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 14%. the project would provide net operating income each year as follows: sales $2,867,000 variable expenses 1,125,000 contribution margin 1,742,000 fixed expenses: advertising, salaries, and other fixed out-of-pocket costs $706,000 depreciation 465,000 total fixed expenses 1,171,000 net operating income $571,000 1. which item(s) in the income statement shown above will not affect cash flows? (you may select more than one answer. single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. any boxes left with a question mark will be automatically graded as incorrect.) (a)sales (b)variable expenses (c) advertising, salaries, and other fixed out-of-pocket costs expenses (d) depreciation expense 2. what are the project’s annual net cash inflows? 3.what is the present value of the project’s annual net cash inflows? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) 4.what is the present value of the equipment’s salvage value at the end of five years? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.) 5.what is the project’s net present value? (use the appropriate table to determine the discount factor(s) and final answer to the nearest dollar amount.)