Gaston Company is considering a capital budgeting project that would require a $2,300,000 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:

Gaston Company is considering a capital budgeting project that would require a $2,300,000 investment in equipment with a useful life of five years and no salvage value. The company's 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: $3,300,000 1,900,000 1,400,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed $600,000 out-of-pocket costs 460,000 Depreciation Total fixed expenses Net operating income 1,060,000 340,000 Click here to view Exhibit 13B-1 and Exhibit 138-2, to determine the appropriate discount factor(s) using tables Required Compute the project's net present value. Net present value