Derrick Iverson is a divisional manager for Holston Company. His annual pay raises are largely determined by his division's return on investment (ROI), which has been above 20% each of the last three years. Derrick 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. Holston Company's discount rate is 16%. The project would provide net operating income each year for five years as follows: Sales Variable expenses $3,200,000 1,350,000 Contribution margin 1,050,000 Fixed expense Advertising, salarien, and other fixed out-of-pocket costs Depreciation $670,000 760,000 Total fixed expenses 1,430,000 5420,000 Net operating income Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the project's net present value. 2. Compute the project's simple rate of return. 3a. Would the company want Derrick to pursue this investment opportunity? 3b. Would Derrick be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 38 Compute the project's net present value. (Round your final answer to the nearest whole dollar amount.) Net present value Required: 1. Compute the project's net present value. 2. Compute the project's simple rate of return. 3a. Would the company want Derrick to pursue this investment opportunity? 3b. Would Derrick be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Req 2 Compute the project's simple rate of return. (Round your answer to 1 decimal place i.e. 0.123 should be consi 12.3%.) Simple rate of return % < Req 1 Req 3A > Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 38 Would the company want Derrick to pursue this investment opportunity? OYes ONO < Req 2 Req 3B > Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 38 Would Derrick be inclined to pursue this investment opportunity? OYes ONO < Req 3A Roq 38 >