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please help Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division's return on investment (RO),
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Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division's return on investment (RO), which has been above 24% each of the last three years. Casey is considering a capital budgeting project that would require a $4,800,000 investment in equipment with a useful life of five years and no salvage value. Pigeon Company's discount rate is 20%. The project would provide net operating income each year for five years as follows: Sales Variable expenses Contribution margin $4,500,000 2,040,000 2,460,000 Fixed expenses: Advertising, salaries, and other fixed out-of- pocket costs $ 810,000 Depreciation 960,000 Total fixed expenses. 1,770,000 Net operating income $ 600,000 Click here to view Exhibit 148-1 and Exhibit 140-2, to determine the appropriate discount factor(s) using tables Required: 1. What is the project's net present value? 2. What is the project's internal rate of return to the nearest whole percent? 3. What is the project's simple rate of return? 4-a. Would the company want Casey to pursue this investment opportunity? 4-b. Would Casey be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Check my work answer in the Laos Der Req 1 Req 2 Req 3 Req 4A Req 48 What is the project's net present value? (Round your final answer to the nearest whole dollar amount.) Net present value Req 2 > Prev 1 of 3 Next > Complete this question by entering your answers in the tabs below. ces Reg 1 Req[2 Req 3 Req 4A Reg 48 What is the project's internal rate of return? (Round your answer to the nearest whole percentage, I.e. 0.123 should be considered as 12%.) Internal rate of return Req 1 Req 3 > Next > Przy 1 of 3 Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 48 What is the project's simple rate of return? (Round your answer to 1 decimal place.) Simple rate of retum 96 Brey 1 of 3 Next >> ces Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 48 Would the company want Casey to pursue this investment opportunity? Yes No Req 3 Req 48 > 215 Next > implete this quest DY Intering your answers in the tabs below Req 1 Req 2 Req 3 Req 4A Req 48 Would Casey be inclined to pursue this investment opportunity? Yes No *Req 4A 243 Next > Step by Step Solution
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