Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division$$s return on investment $($ROI$),$ which has been above $24\%$ each of the last three years. Casey is considering a capital budgeting project that would require a $$5,050,000$ investment in equipment with a useful life of five years and no salvage value. Pigeon Company$$s discount rate is $20\%.$ The project would provide net operating income each year for five years as follows:

Sales $ $4,700,000$

Variable expenses $2,120,000$

Contribution margin $2,580,000$

Fixed expenses:

Advertising, salaries, and other fixed out$-$of$-$pocket costs $ $830,000$

Depreciation $1,010,000$

Total fixed expenses $1,840,000$

Net operating income $ $740,000$