CH 6 0.16 DO Casey Nelson is a divisional manager for Pigeon Company His annun pay falses are largely determined by his division's return on investment (ROI), which has been above 20% each of the last three years, Casey is considering a capital budgeting project that would require a $3,600,000 investment in equipment with a useful life of five years and no salvage value, Pigeon Company's discount rate is 16%. The project would provide net operating income each year for five years as follows: Sales $ 3,500,000 Variable expenses 3.640,000 Contribution margin 1.860,00 Fixed expenses Advertising, salaries, and other fixed out-of-pocket costs $710,000 Depreciation 720,000 Total fixed expenses 1,438.000 Net operating income 1430,000 Click here to view Exhibit 128-1 and Exhibit 128:2. 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? 4-5. Would Casey be inclined to pursue this investment opportunity? Print References