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1 Casey Nelson is a divisional manager for Pigeon Company, His annuo pay raises are largely determined by his division's return on investment (ROI), which
1 Casey Nelson is a divisional manager for Pigeon Company, His annuo pay raises are largely determined by his division's return on investment (ROI), which has been above 24% each of the last three years. Casey is considering a capital budgeting project that would require a $4800.000 investment in equipment with a useful life of five years and no salvage value, Pigeon Company's discount rate is 20%. The project would provide net operating income each year for five years as follows: C 2.000,00 Sales Variable expenses Contribution margin Fixed expenses Advertising, series, and other fixed out-of-pocket costs Depreciation Total fixed expenses Het operating income $80,000 $690.000 Click here to view Exhibit 128-1 and Exhibit 128-2. to determine the appropriate discount factors) using tables. Required 1. What is the project's net present value? 2. What is the project's internal rate of return? 3. What is the project's simple rate of return? 4-a. Would the company want Casey to pursue this investment opportunity? 4-6Would Casey be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 45 What is the project's net present value? (Round your final answer to the nearest whole dollar amount.) det present value Reg1 Reg 2 Reg 3 Reg 4A Reg 48 What is the project's internal rate of return? (Round your answer to the nearest whole percentage, le 0.123 should be considered as 12%.) Internal rate of return Reg 1 Reg 2 Req3 Req 4A Req 4B What is the project's simple rate of return? (Round your answer to 1 decimal place.) Simple rate of return % Would the company want Casey to pursue this investment opportunity? OYes ON Reg 1 Reg 2 Req3 Reg 4A Reg 4B Would Casey be inclined to pursue this investment opportunity? Yes No
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