Cardinal Company is considering a project that would require a $2,745,000 investment in equipment witha 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 $500,000. The company's discount rate is 18%. The project would provide net operating income each year as follows: $ 2,857,000 1,011,000 Sales Variable expenses 1,846,000 Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation $799,000 449,000 Total fixed expenses 1,248,000 Net operating income $ 598,000