Cardinal Company is considering a project that would require a $2,815,000 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 companys discount rate is 16 The project would provide net operating income each year as follows Sales $ 2,863,000 Variable expenses 1,014,000 Contribution margin 1,849,000 Fixed expenses Advertising, salaries, and other fixed out of pocket costs $ 781,000 Depreciation 483,000 Total fixed expenses 1,264,000 Net operating income $ 585,000 Click here to view Exhibit 10 1 and Exhibit 10 2, to determine the appropriate discount factor(s) using tables Required 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 45 What was the projects actual net present value (Negative amount should be indicated by a minus sign Round discount factor(s) to 3 decimal places, other intermediate calculations and final answer to the nearest whole dollar )

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Cardinal Company is considering a project that would require a $2,815,000 investment in equipment with a useful life of five years. At the end of

Cardinal Company is considering a project that would require a $2,815,000 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 companys discount rate is 16%. The project would provide net operating income each year as follows:


Sales			$	2,863,000
Variable expenses				1,014,000
Contribution margin				1,849,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs	$	781,000
Depreciation		483,000
Total fixed expenses				1,264,000
Net operating income			$	585,000

Click here to view Exhibit 10-1 and Exhibit 10-2, to determine the appropriate discount factor(s) using tables.

Required: 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 45%. What was the projects actual net present value? (Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, other intermediate calculations and final answer to the nearest whole dollar.)