12-17 (Algo) Net Present Value Analysis; Internal Rate of Return; Simple Rate of Return [LO12-2, L012-3, 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 24% each of the last three years. Casey is considering a capital budgeting project that would require a $4,200,000 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: Sales Variable expenses $ 4,100,000 1,880,000 2,220,000 Contribution margin Fixed expenses: Advertising, solaries, and other fixed out- of-pocket costs Depreciation $770,000 840,000 Total fixed expenses Net operating income 1,610,000 $610,000 Click here to view Exhibit 128-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. 00:43:25 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? Complete this question by entering your answers in the tabs below. Book Req 11 Req 2 Prive Req 3 Req 4A Req 40 ferences What is the project's net present value? (Round your final answer to the nearest whok dollar amount.) Net present value Req Req 2 > 312 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? 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 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? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 4B What is the project's simple rate of return? (Round your answer to 1 decimal place.) Simple rate of returni 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? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req3 Req 4A Req 4B Would the company want Casey to pursue this investment opportunity? Yes No 42:34 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? Complete this question by entering your answers in the tabs below. look int Req 1 Req 2 Req 3 Req 4A Req 48 rences Would Casey be inclined to pursue this investment opportunity? Yes ONO