Sanders Company has an opportunity to manufacture and sell a new product for a five-year period. The company estimated the following costs and revenues for the new product: Cost of new equipment Initial working capital required Overhaul of the equipment after three years Salvage value of the equipment after five years Annual revenues and costs: $420,000 $115,000 $ 50,000 $ 30,000 Sales Variable expenses Fixed out-of-pocket operating costs $850,000 $500,000 $195,000 When the project concludes in five years the working capital will be released for investment elsewhere in the company.