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Cardinal Company is considering a five$-$year project requiring a $$2,800,000$ investment in equipment with a useful life of five years and no salvage value. The company's discount rate is $14\%.$ The project would provide net operating income in each of five years as follows:

Sales

Variable expenses

Contribution margin

Fixed expenses:

Advertising, salaries, and other

fixed out$-$of$-$pocket costs

Depreciation

Total fixed expenses

Net operating income

$$2,845,000$

$1,109,000$

$1,736,000$

$$799,000$