Cardinal Company is considering a five$-$year project requiring a $$2,755,000$ investment in equipment with a useful life of five years and no salvage value. The company's discount rate is $14\%.$ The project would provide net operating income in each of five years as follows:

Sales

Variable expenses

contribution margin

Fixed expenses:

Advertising, salaries, and other

fixed out$-$of$-$pocket costs $$721,000$

Depreciation $,551,000$

Total fixed expenses

Net operating income

$$2,875,000$

$1,124,000$

$1,751,000$

$[1,272,000],[$$$479,000]$

Click here to view Exhibit $14$B$-1$ and Exhibit $14$B$-2,$ to determine the appropriate discount factor$($s$)$ using table.

$7.$ What is the project's payback period?

$8.$what's the project's simple rate of return for each of the $5$ years