In Year 1, a corporation incurred $3,500,000 of costs related to the development of a new software product. Of these costs, $1,000,000 was incurred after technological feasibility was established. The product development was completed and the product was available for sale to customers early in Year 2. The corporation estimated that revenues from the sale of the new product would be $1,200,000 over 5 years. What amount of expense should the company report for Year 1?

Group of answer choices

$500,000

$700,000

$2,500,000

$3,500,000