CASES FROM THE REAL WORLD Case Study
Acuity's Workplace Campus
Employees at Acuity, an insurance provider in Sheboygan, Wisconsin, enjoy amenities beyond the
imagining of the average U. S. worker. The company offers flexible workdays, on-site leadership training,
tuition reimbursement for continuing education, and company scholarships. Its $130 million campus also
provides an on-site fitness center complete with a climbing wall, a garden, and a cafeteria serving
nutritious meals. Employees are offered the services of an on-site massage therapist, and there are on-
site banking and dry-cleaning services.
The campus was designed to be a showpiece at the entrance to the town of Sheboygan. In fact, it
features a working Ferris wheel and a theater-in-the-round that seats two thousand, which the company
makes available for community events and town hall meetings.

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.)