This question is from chapter 12 of Managerial Accounting 16^th edition by Ray Garrison.

Required information The Foundational 15 [LO13-1, LO13-2, LO13-3, LO13-5, LO13-6] [The following information applies to the questions displayed below.] Cardinal Company is considering a five-year project that would require a $3,025,000 investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 16%. The project would provide net operating income in each of five years as follows: Sales Variable expenses Contribution margin Fixed expenses: $2,737,000 1.001,000 1,736,000 Advertising, salaries, and other fixed out-of-pocket costs Depreciation $ 610,000 605,000 Total fixed expenses Net operating income 1,215,000 $ 521,000