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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

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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 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 Company's discount rate is 20%. The project would provide net operating income each year for five years as follows: $ 5,400,000 2,400,000 3,000,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income $ 900,000 1,220,000 2,120,000 880,000 $ Click here to view Exhibit 13B-1 and Exhibit 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? 4-6. Would Casey be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 48 What is the proj 's net present value? (Round your final answer to the nearest whole dollar amount) Net present value Complete this question by entering your answers in the tabs below. Reg 1 Route Reg 3 Reg 4 Reg 4B What is the project's internal rate of return? (Round your answer to the nearest whole percentage, Le 0.12) should be considered as 12%) Internal rate of retum % Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4A Reg 48 What is the project's simple rate of return? (Round your answer to 1 decimal place.) Simple rate of return %

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