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 $22\%$ each of the last three years. Casey is considering a capital budgeting project that would require a $$3,800,000$ investment in equipment with a useful life of five years and no salvage value. Pigeon Company's discount rate is $18\%.$ The project would provide net operating income each year for five years as follows:

Click here to view Exhibit $7$B$-1$ and Exhibit $7$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?