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 requiring 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 $14$B$-1$ and Exhibit $14$B$-2,$ to determine the appropriate discount factor$($s$)$ using tables.

Required:

What is the project's net present value?

What is the project's internal rate of return to the nearest whole percent?

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?