Gaston Company is considering a capital budgeting project that would require a $2,800,000 investment in equipment with a useful life of five years and no salvage value. The companys tax rate is 30% and its after-tax cost of capital is 12%. It uses the straight-line depreciation method for financial reporting and tax purposes. The project would provide net operating income each year for five years as follows: Sales $ 3,200,000 Variable expenses 1,540,000 Contribution margin 1,660,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs $ 660,000 Depreciation 560,000 Total fixed expenses 1,220,000 Net operating income $ 440,000

Compute the projects net present value.