Cardinal Company is considering a five-year project that would require a $2,805,000 investment in equipment with a useful life of five years and no salvage value. The companys discount rate is 14%. The project would provide net operating income in each of five years as follows:

Sales		$ 2,741,000
Variable expenses		1,125,000
Contribution margin		1,616,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs	$ 642,000
Depreciation	561,000
Total fixed expenses		1,203,000
Net operating income		$ 413,000

13. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio, which actually turned out to be 50%. What was the projects actual net present value?

14. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio, which actually turned out to be 50%. What was the projects actual payback period?