Exercise 14-9 (Algo) Net Present Value Analysis and Simple Rate of Return [LO14-2, LO14-6] Derrick lverson is a divisional manager for Holston Company. His onnual 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: Click here to view Exhibit 14B-t and Exhibit 14B.2 to determine the appropriate discount factor(s) using tables. Required: 1. Compute the projects net present volue. 2 Compute the project's simple rate of retum. 3a. Would the company wont Derick 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. Compute the project's net present value. (Round your final answer to the nearest whole dollar amount) Exercise 14-9 (Algo) Net Present Value Analysis and Simple Rate of Return [LO14-2, LO14-6] Derrick Iverson is a divisional manager for Holston Compary. His annual pay raises are largely determined by his division's return on investment (ROl), 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: Click here to view Exhibit 14B.1 and Exhibit148-2, 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 compony 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 prolect's simple rate of return. (Round your answer to 1 decimal place i.e. 0.123 should be considered as 12.3%6 ) Exercise 14-9 (Algo) Net Present Value Analysis and Simple Rate of Return [LO14-2, LO14-6] Derick lverson is a divisional manager for Holston Company. His annual pay raises are largely determined by his division's return on investment (RO), 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 operoting income each year for five years as follows Click here to view Exhibit 14B-1 and Exhibit 148-2, to determine the oppropriate discount factor(s) using tables. Required: 1. Compute the project's net present value. 2. Compute the projects simple rate of retum. 30. Would the compony wan Derrick to pursue this investment opportunity? 3b. Would Derick be indined to pursue this investment opportunity? Complete this question by entering vour answers in the tabs below. Would the company want Derrick to pursue this investment opportunity? Exercise 14-9 (Algo) Net Present Value Analysis and Simple Rate of Return [LO14-2, LO14-6] Derrick Iverson is a divisional manager for Holston Company. His annual pay raises are largely determined by his division's return on investment (ROl), 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: Click here to view Exh bit 14B-1 and Exhibit 14B-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 rote of return. 36. Would the compony 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 irwestment epportunity