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Cardinal Company is considering a five-year project that would require a $2,812,000 investment in equipment with a useful life of five years and no salvage value. The companys discount rate is 16%. The project would provide net operating income in each of five years as follows:

Sales		$ 2,855,000
Variable expenses		1,010,000
Contribution margin		1,845,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs	$ 798,000
Depreciation	562,400
Total fixed expenses		1,360,400
Net operating income		$ 484,600

Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using table.

6. What is the projects internal rate of return?