Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his divisions 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 $6,100,000 investment in equipment with a useful life of five years and no salvage value. Pigeon Companys discount rate is 20%. The project would provide net operating income each year for five years as follows:

Sales $ 5,400,000

Variable expenses 2,400,000

Contribution margin 3,000,000

Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs $900,000

Depreciation 1,220,000

Total fixed expenses 2,120,000

Net operating income $ 880,000

Required: 1. What is the projects net present value? (Round discount factor(s) to 3 decimal places.)

2. What is the projects internal rate of return to the nearest whole percent?

3. What is the projects simple rate of return? (Round percentage answer to 1 decimal place. i.e. 0.123 should be considered as 12.3%.)