Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his divisions 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 $5,850,000 investment in equipment with a useful life of five years and no salvage value. Pigeon Companys discount rate is 20%. The project would provide net operating income each year for five years as follows:

Sales		$	5,200,000
Variable expenses			2,320,000
Contribution margin			2,880,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs	$880,000
Depreciation	1,170,000
Total fixed expenses			2,050,000
Net operating income		$	830,000

Click here to view Exhibit 8B-1 and Exhibit 8B-2, to determine the appropriate discount factor(s) using tables.

Required:

1. What is the projects net present value? (Round discount factor(s) to 3 decimal places.)

2. What is the projects internal rate of return to the nearest whole percent?

3. What is the projects simple rate of return? (Round percentage answer to 1 decimal place. i.e. 0.123 should be considered as 12.3%.)