12-17 (Algo) Net Present Value Analysis; Internal Rate of Return; Simple Rate of Return [LO12-2, LO12-3, LO12-6] Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division's return on investment (ROI), which has been above 23% each of the last three years. Casey is considering a capital budgeting project that would require a $4,100,000 investment in equipment with a useful life of five years and no salvage value. Pigeon Company's discount rate is 19%. The project would provide net operating income each year for five years as follows: Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed. out-of-pocket costs Depreciation Total fixed expenses $ 4,000,000 1,840,000 2,160,000 $760,000 820,000 1,580,000 $580,000 Net operating income Click here to view Exhibit 128-1 and Exhibit 128-2, to determine the appropriate discount factor(s) using tables. Required: 1. What is the project's net present value? 2. What is the project's internal rate of return to the nearest whole percent? 3. What is the project's simple rate of return? 4-a. Would the company want Casey to pursue this investment opportunity? 4-b. Would Casey be inclined to pursue this investment opportunity? 4-b. Would Casey be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 48 What is the project's net present value? (Round your final answer to the nearest whole dollar amount.) Net present value Req1 Req 2 > Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 48 What is the project's internal rate of return? (Round your answer to the nearest whole percentage, i.e. 0.123 should be considered as 12%.) Internal rate of return Complete this question by entering your answers in the tabs below. Req 1 Req 2 Red 3 Req 4A Req 48 What is the project's simple rate of return? (Round your answer to 1 decimal place.) Simple rate of retum Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 48 Would the company want Casey to pursue this investment opportunity? OYes ONO ences Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Rea 4 Would Casey be inclined to pursue this investment opportunity? OYes ONO