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 23% each of the last three years. Casey is considering a capital budgeting project that would require a $5,800,000 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:

Sales$5,100,000Variable expenses2,280,000Contribution margin2,820,000Fixed expenses:Advertising, salaries, and other

fixed out-of-pocket costs$870,000Depreciation1,160,000Total fixed expenses2,030,000Net operating income$790,000

Click here to viewExhibit 13B-1andExhibit 13B-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. Req 1 Req 2 Req 3 Req 4A Req 4B What is the project's net present value? (Round your final answer to the nearest whole dollar amount.) Net present valueComplete 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 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 %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 return %Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 4B Would the company want Casey to pursue this investment opportunity? OYes ONOComplete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 4B Would Casey be inclined to pursue this investment opportunity? OYes ONO