Cardinal Company is considering a five-year project that would require a $2,500,000 investment in equipment with a useful life of five years and no salvage value. The companys discount rate is 12%. The project would provide net operating income in each of five years as follows:

Sales

$

2,853,000

Variable expenses

1,200,000

Contribution margin

1,653,000

Fixed expenses:

Advertising, salaries, and other fixed out-of-pocket costs

$

790,000

Depreciation

500,000

Total fixed expenses

1,290,000

Net operating income

$

363,000

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.)

	Sales
	Variable expenses
	Advertising, salaries, and other fixed out-of-pocket costs expenses
	Depreciation expense

3.

What is the projects net present value? (Round discount factor(s) to 3 decimal places and final answer to the nearest whole dollar amount.)