1. Private Property: something gives you the right to and it. A person can’t make a without the right to own property. 2. Markets & Prices: Buyers and sellers freely exchange goods and services on the . The Market forces of Supply and Demand will determine the price. 3. Incentives: People’s own self-interest can them to produce a good or service in hopes of making a . Self-interest motivates consumers who satisfy their wants and needs at the best possible . 4. Freedom of Choice: People are free to choose what to and what to . The choices that producers and consumers make determine what and are available. 5. Competition: Producers with each other for by trying to produce goods and services that are more attractive and for the right . 6. Limited Government Role: The can’t make rules about what and how much gets . The government’s main role is to make sure the is fair and producers have a chance to .

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.)