EXHIBIT 12B-1 Present Value of \\( \\$ 1 ; \\frac{1}{(1+r)^{n}} \\) 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 \\$3,000,000 investment in equipment with a useful life of five years and no salvage value. Holston Company's discount rate is \15. The project would provide net operating income each year for five years as follows: Click here to view Exhibit 12B-1 and Exhibit 12B-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? EXHIBIT 12B-2 Present Value of an Annuity of \\( \\$ 1 \\) in Arrears; \\( \\frac{1}{r}\\left[1-\\frac{1}{(1+r)^{n}}\ ight] \\)