Exercise 12-9 (Algo) Net Present Value Analysis and Simple Rate of Return [LO12-2, LO12-6] 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 $4,140.000 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: Click here to view Exhibit 12B-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. Compute the project's net precent value. (Round your final answer to the nearest whole dollar amount.) 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 $4,140,000 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: Click here to view Exhibit 128-1 and Exhibit 128-2, to determine the oppropriate discount factor(s) using tables. Required: 1. Compute the project's net present value. 2. Compute the project's simple rate of retum. 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 project's jimple rate of return. (Round your answer to 1 decimal place i.e. 0.123 should be considered as 12.3%. investment (ROI) which has been above 20% each of the last three years. Derrick is considering a capital budgeting project that would roquire a $4,140,000 investment in equipment with a useful life of five years and no salvage value. Holston Compary's discount rate is 16%. The project would provide net operating income each year for five years as follows: Click here to view Exhibit 128=1 and Extibit 128-2, to determine the oppropriate discount factor(5) using tables. Required: 1. Compute the project's net present value. 2. Compute the project's simple rate of retum. 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 nant berrick to pursue this imvestment opportunity? Investment (ROI), which has been above 20% each of the last three years. Demrick is considering a capital budgeting project that would require a $4,140,000 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: Click here to view Exhibit:128-1 and Exhibit 12B-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 indined to pursue this investment opportunity? EXETBTT 128-2 Present Value of an Annuity of \$1 in Arrears, Vrit (1+0n)) haitistT 12h-1 Present Malue ot 51; (T+r)21