Martius company, a maker of high-tech gadgets, routinely leases equipment made by competitors in order to reverse-engineer design features martius may want to incorporate in its own products. the reverse-engineering process is part of martius’s 9-month product development cycle and involves disassembling then later reassembling the equipment. leaseco. leases such equipment to martius under a 12-month lease term. according to the terms of the lease, at the end of the lease term martius will have the option to purchase the equipment for less than its expected fair value at that time. martius company is located in an area where commercial space is at a premium, there is no internal use for the competitor equipment at the end of martius’s product development cycle, and martius’s management wishes to focus solely on the manufacture and sale of its own equipment. management also wishes to minimize liabilities reported on the balance sheet. in light of the above, as which type of lease is martius most likely to record, correctly, its arrangement with leaseco.?

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.)