Cardinal Company is considering a project that would require a $2.750000 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 18%. The project would provide net operating income each year as follows: Sales Variable expenses $2,849,000 1,122.000 Contribution margin Fixed expenses Advertising. salaries, and other 1,727000 fixed out-of-pocket costs Depreciation 752,000 470,000 Total fixed expenses 1,222.000 Net operating income $505.000