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Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division's re investment (ROI). which has been
Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division's re investment (ROI). which has been above 24% each of the last three years. Casey is considering a capital budgeting project require a $4,200,000 investment in equipment with a useful life of five years and no salvage value. Pigeon Company's disc 20%. The project would provide net operating income each year for five years as follows: Click here to view Exhibit 7B 1 and Exhibit 7B 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? Complete this question by entering your answers in the tabs below
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