Casey Nelson is a divisional manager for Pigeon Company. His annual pay ralses 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 $5,510,000 Investment in equipment with a useful Iff 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: Click here to view and Exhibit 128-2, to determine the approprlate discount factor(s) using tables. Required: 1. What is the project's net present value? 2 What is the project's intemal 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. What is the project's net present value? (Round your final answer to the nearest whole dollar amount.) Casey Nelson is a divisional manager for Plgeon Company. His annual pay ralses 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 $5,510,000 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: Click here to view Exhibit 12B-1 and to determine the appropriate discount factor(s) using tables. Requlred: 1. What is the project's net present value? 2. What is the project's intemal 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. 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%.) Casey Nelson is a divisional manager for Plgeon Company. His annual pay ralses 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 $5,510,000 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: Click here to view Exhiblt 12B-1 and Exhiblt 12B-2, to determine the approprlate 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 incined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. What is the project's simple rate of return? (Round your answer to 1 decimal place.) EXHIBIT 12B-1 Present Value of $1;(1+r)n1 EXHIBIT 12B-2 Present Value of an Annuity of $1 in Arrears; 1/r(1(1/(1+r)n))
