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 16%. 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		1,870,000
Contribution margin		1,330,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs	$ 590,000
Depreciation	400,000
Total fixed expenses		990,000
Net operating income before tax		$ 340,000

Required:

Compute the projects net present value.