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 $5,050,000 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			$	4,700,000
Variable expenses				2,120,000
Contribution margin				2,580,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs	$	830,000
Depreciation		1,010,000
Total fixed expenses				1,840,000
Net operating income			$	740,000
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 projects net present value? 2. What is the projects internal rate of return to the nearest whole percent? 3. What is the projects 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?