Casey Nelson is a divisional manager for pigeon company. His annual pay raises are largely determined by his divisions return on investment which has been above 23% each of the last three years. Casey is considering a capital budgeting project that would require a $4,100,000 investment and equipment with the useful life for five years and no salvage value. Pigeon companies discount rate is 19%. The project would provide net operating income each o Casey Nelson is a divisional manager for pigeon company. His annual pay raises are largely determined by his divisions return on investment which has been above 23% each of the last three years. Casey is considering a capital budgeting project that would require a $4,100,000 investment in equipment with the useful life of five years and no salvage value. Pigeon companies discount rate is 19%. The project would provide net operating income each year for five years as follows .

exhibit 1 and 2 follow to determine appropriate discount factors using tables

1. what is the projects not present value ?

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

3. what is the projects a simple rate of return?

4. a. with the company want Casey to pursue this investment opportunity?

4. b. would Casey be inclined to pursue with this investment opportunity?

equire a $4100,000 investment in equipment with a useful life of five 9%. The project would provide net operating income each year for five Sales Variable expenses Contribution margin Fixed expenses: $ 4,000,000 1,840,000 2,160,000 Advertising, salaries, and other fixed out-of-pocket costs Depreciation 760,000 820,000 Total fixed expenses Net operating income 1,580,e00 $ 580,000 Click here to view Exhibit 13B1 and Exhibit 13B-2, to determine the appro 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? 000 - Periods 4% 5% 6% 7% ek 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% .962 0.952 0.943 0.935 0.926 0.917 0909 0.901 0.893 0885 0.877 0.870 O 862 O 855 0.347 0.840 0.833 0.826 0.820 0.8 13 0 806 0,800 2 1.886 1859 1.833 808 1.783 1.759 1.736 1.713 1.690 1668 1647 1.626 1.605 1.585 1.566 1.547 1.528 1.509 1.492 1.474 1.457 1.440 3 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.444 2.402 2.361 2.322 2.283 2246 2210 2.174 2.140 2.106 2.074 2042 2011 1.981 1.952 4 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.102 3037 2.974 2914 2855 2.798 2743 2.690 2.639 2.589 2.540 2494 2.448 2.404 2.362 5 4.452 4.329 4.212 4.100 3993 3.890 3.791 3.696 3.605 3.517 3.433 3.352 3.274 3.199 3.127 3058 2.991 2926 2.864 2.803 2.745 2689 6 5.242 5.076 4917 4.767 4.623 4.486 4.355 4.231 4.11 3998 3.889 3.784 3.685 3.589 3.498 3.410 3.326 3.245 3.167 3.092 3.020 2.951 76.002 5.786 5.582 5.389 5.206 5.033 4.868 4.712 4.564 4.423 4.288 4.160 4.039 3.922 3.812 3.706 3.605 3.508 3.416 3.327 3.242 3.161 8 6.733 6.463 6210 5971 5.747 5535 5.335 5.146 4.968 4.799 4639 4.487 4.344 4.207 4.078 3.954 3837 3.726 3619 3.18 3.421 3.329 9 7.435 7.108 6.802 6515 6.247 5995 5.759 5537 5.328 5.132 4.946 4772 4.607 4.451 4303 4.163 4.031 3.905 3.786 3.673 3.566 3463 10 8.111 7.722 7.360 7024 6710 6.418 6.145 5.889 5.650 5.426 5216 5.019 4.833 4.659 4.494 4.339 4.192 4.054 3.923 3.799 3.682 3571 11 8.760 8.306 7.887 7.499 7.139 6.805 6.495 6.207 5938 5687 5.453 5.234 5029 4.836 4.656 4486 4.327 4.177 4035 3.902 3776 3.656 12 9.385 8.863 8.384 7943 7.536 7.161 6.814 6.492 6.194 5918 5660 5.421 5.197 4.988 4.793 4611 4439 4278 4.127 3985 3.851 3.725 13 9.986 9.394 8.853 8.358 7904 7.487 7.103 6.750 6.424 6.122 5842 5583 5342 5.118 4910 4.715 4533 4 362 4.203 4.053 3912 3.780 4 10563 9.899 9.295 8.745 8.244 7.786 7.367 6.982 6.628 6.302 6.002 5.724 5.468 5229 5.008 4.802 4.611 4432 4.265 4.108 3.962 3824 is 11.118 10380 9.7 12 9.108 8559 80617 606 7 191 6811 6.462 6.142 5.847 5.575 5324 5092 4.876 4.675 4.489 4.315 4.153 4.001 3.859 8.313 7824 7.379 6.974 6604 6265 5.954 5.668 5.405 5.162 4938 4.730 4.536 4.357 4.189 4.033 3.887 8.851 10.838 10.106 9.447 17 12.166 11.274 10.477 9.763 9.122 8.544 8.022 7.549 7.120 6.729 6.373 6047 5.749 5.475 5.222 4.990 4.775 4.576 4.391 2.659 11.690 10828 10.059 9372 8.756 8.201 7.702 7.250 6.840 6.467 6.128 5.818 5.534 5.273 5033 4.812 4.608 4419 4.243 4.080 3.928 0336 9.604 8.950 8.365 7.839 7.366 6938 6.550 6.198 5.877 5.584 5.316 5070 4.843 4.635 4.442 4.263 4097 3942 590 12.462 11470 10.594 9818 9.129 8514 7.963 7469 7.025 6623 6.259 5.929 5.628 5.353 5101 4870 4657 4460 4279 4.110 3.954 14.029 12.821 11.764 10836 10.017 9.292 8649 8.075 7.562 7.102 6.687 6.312 5973 5665 5.384 5.127 4.891 4675 4476 4.292 4.121 3963 .176 7.645 7.176.743 6.359 6011 5.696 5.410 5.149 4909 4.690 4.488 4.302 4.130 3.970 57 13.489 12.303 11.272 10.371 9.580 8.883 8266 7.718 7.230 6.792 6.399 6044 5.723 5.432 5.167 4.925 4.703 4499 4.311 4.137 3.976 550 11.469 10.529 9.707 8.985 8.348 7.784 7.283 6835 6.434 6.073 5.746 5.451 5.182 4.937 4.713 4.507 4.318 4.143 3.981 9.823 9077 8422 7.843 7.330 6.873 6.464 6.097 5.766 5.467 5195 4.948 4.721 4.514 4.323 4.147 3.985 22 14.451 13.163 12.042 11.061 10.201 9.442 8.772 8 23 1485 24 15.247 13.799 12.5 25 15.622 14.094 12.783 11.654 10.675 826 10.810 9.929 9.161 8.488 7896 7.372 6906 6.491 6.118 5.783 5.480 5.206 4 4.956 4.728 4.520 4.328 4.151 3.988 1 10.116 9.307 8.602 7.984 7.441 6.961 6.534 6.152 5.810 5.502 5.223 4.970 4.739 4.528 4.335 4.157 3.992 4.746 4.534 4.339 4.160 3.995 16.330 14.643 13.211 11.987 10.935 10.027 9.237 8.548 7.943 7.409 6935 6.514 6.136 5.798 16.663 14.898 13.406 12.137 11.051 10.116 9.307 8.602 7.984 7.441 6961 28 984 15.141 13.591 12.278 11.158 10.198 9.370 8.650 8.022 7.470 6.983 6.551 6.166 5.820 5510 5.229 4.975 12.409 11.258 10.274 9.427 8.694 8.055 7.496 7.003 6566 6.177 5829 5.517 5.235 4.979 40 19,793 17.159 15046 13332 11.925 10757 9779 8.951 8244 7.634 7.105 6.642 6233 5,871 5,548 5,258 4997 4760 4544 4347 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-b. Would Casey be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 4B What is the project's net present value? (Round your final answer to the nearest whole dollar amount.) Net present value Req 2 > K Prev 3 of 6l Next Advertising, salaries, and other $ 760,000 fixed out-of-pocket costs 1,580,000 580,000 Total fixed expenses Net operating income Click here to view Exhibit 1381 and Exhibit 138-2, to determine the appropriate discount factorts) 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-b. Would Casey be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Req 4B Req 4A Req 2 Req 3 Req 1 What is the project's internal rate of return? (Round your answer to whole decimal place i.e. 0.123 should be considered as 12%.) Internal rate of return Req1 Req 3 > Click here to view Exhibit 138-1 and Exhibit 13B 2, to determine the appropriate discount fact 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-b. Would Casey be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Req 2 Req 1 What is the project's simple rate of return? (Round percentage answer to 1 decimal place.) Simple rate of return Req 3 Req 4A Req 4B K Req 2 Req 4A > 3. 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? Complete this question by entering your answers in the tabs below Req 2 Req 1 Would the company want Casey to pursue this investment opportunity? OYes Req 3 Req 4B Req 4A ONo Req 4B K Req 3 b. Would Casey be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below Req 4B Req 3 Req 4A Req 2 Req 1 Would Casey be inclined to pursue this investment opportunity? Yes No K Req 4A