Derrick iverson is a divisional mangger for Holston Company. His annual pay raises are largely determined by his division's return on investment (ROD, which has been above 25% ench of the last three years. Derrick is considering a capital budgeting project that would requite a $5,770,000 investment in equipment with a useful life of five years and no salvage value. Hoiston Company's discount rate is 19\%. The project would provide net operating income each year for five years as follows: Click here to view Extibit 128-1 and Exthibit 128-2, to determine the appropriate discount factor(s) using tabies. Required: 1. Compute the project's net present value. 2. Compute the projects simple rate of return. 3a. Would the company want Derrick to pursue this investment opportunity? 36. Would Derrick be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Would Derrick be inclined to pursue this investment opportunity? Derrick Iverson is a divisional manager for Holston Company. His annual pay raises are largely determined by his division's return on invertment (RO), which has been above 25% each of the last three years. Derrick is considering a capital budgeting prolect that would require a $5,170,000 investment in equipment with a useful life of five years and no salvage value. Holston Company's discount rate is 19\%6. The project would provide net operating income each year for five years as follows: Click here to view Exhibit 128-1 and Exhibit 128-2, 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. Compute the grojects simple rate of retum, (Round your answer to 1 decima place 1 e. 0.123 should be conaldered as Derrick lverson is a divislonal manager for Holston Company. His annual pay raises are largely determined by his division's return on Investment (RO), which has been above 25\% each of the last three years. Derrick is considering a capital budgeting project that would require a $5,170,000 investment in equipment with a useful ife of five years and no salvoge value. Holston Company's discount rate is 19\%. The project would provide net operating income each year for five years as follows: Click there to view Exhibit 128-1 and Exh bat128-2, to determine the approprlate discount factor(5) using tables Required: 1. Compute the projocr'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. Would the company warit Derrick to pursue this investment opportunity? Investment (RO), which has been above 25% each of the last three yoars. Derrick is considering a capital budgeting project that would require a $5,170,000 investment in equipment with a useful ife of five years and no salvage value. Holston Company's discount rate is 19\%. The project would provide net operating income each year for five years as follows: Click here to view Exhibit 128-1 and Exhibit 128-2, to determine the appropriate discount factor(5) 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. Would Derrick be inclined to pursue this investment opportunity
