Gaston Company is considering a capital budgeting project that would require a $2,000,000 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 13%. 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 $ 2,800,000

Variable expenses 1,600,000

Contribution margin 1,200,000

Fixed expenses:

Advertising, salaries, and other fixed out-of-pocket costs $ 500,000

Depreciation 400,000

Total fixed expenses 900,000

Net operating income $ 300,000

Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables.

Required:

Compute the projects net present value. (Round discount factor(s) to 3 decimal places.)