18 0.47 points Derrick Iverson is a divisional manager for Holston Company. His annual pay raises are largely determined by his division's return on Investment (RON, which has been above 20% each of the last three years. Derrick is considering a capital budgeting project that would require a $3,080,000 investment in equipment with a useful life of five years and no salvage value, Holston Company's discount rate is 17%. The project would provide net operating income each year for five years as follows: Sales $ 2,700,000 Variable expenses 1,100,000 Contribution margin 1,600,000 Tixed expenses: Advertising, salaries, and other fixed out-of-pocket costs $ 620,000 Depreciation 616,000 Total fixed expenses 1.236.000 Net operating income $364,000 ebook Hint Fies Click here to view Exhibit 128.1 and Exhibit:128-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the project's net present value. 2. Compute the project's simple rate of return 30. Would the company want Derrick to pursue this investment opportunity? 3b. Would Derrick be inclined to pursue this investment opportunity? Print References Complete this question by entering your answers in the tabs below. Reg 2 Reg 38 Reg 1 Rea Compute the project's net present value. (Round your final answer to the nearest whole dollar amount.) Net present value Req2 > Required: 1. Compute the project's net present value. 2. Compute the project's simple rate of return. 3a. Would the company want Derrick to pursue this investment opportunity? 3b. Would Derrick be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req Req 3B Compute the project's simple rate of return. (Round your answer to 1 decima place i.e. 0.123 12.3%) Simple rate of return % 19 Oxford Company has limited funds available for investment and must ration the funds among four competing projects. Selected information on the four projects follows: 047 points Life of Present the Internal Investment value of Project Rate of Project Required Cash Inflows (years) Return A $ 200.000 $ 234,323 7 220 B $ 118,000 $ 207.000 12 198 c $ 103,000 $ 165,035 7 D $ 162,000 $ 263,136 3 170 The net present values should be computed using a 10% discount rate. The company wants your assistance in determining which project to accept first second, and so forth. eBook 200 Fles Print Required: 1. Compute the profitability Index for each project 2. In order of preference, rank the four projects in terms of net present value, profitability Index, and Internal rate of return Complete this question by entering your answers in the tabs below. Required 2 Required: Compute the profitability index for each project. (Round your answers to 2 decimal places.) Project Probility Indes A 0 Required 2 > Required: 1. Compute the profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, profitability index, and internal rate of return. Complete this question by entering your answers in the tabs below. Required 1 Required 2 In order of preference, rank the four projects in terms of net present value, profitability Index, and internal rate of return. Net Present Profitability Internal Rate of Return First preference Second preference Third preference Fourth preference Value Index 20 The Cambro Foundation, a nonprofit organization, is planning to invest $209,710 in a project that will last for three years. The project will produce net cash inflows as follows: 0.47 points Year 1 Year 2 Year 3 $ 65,000 $ 79,000 2 eBook Click here to view Exhibit 128-1 and Exhibit 128-2. to determine the appropriate discount factor(s) using table. Required: Assuming that the project will yield exactly a 7% rate of return, what is the expected net cash inflow for Year 3? Fles Net cash inflow Print References