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Please help with all parts, thank you! Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his
Please help with all parts, thank you!
Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division's return on investment (RON, which has been above 22% each of the last three years. Casey 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. Pigeon Company's discount rate is 18%. The project would provide net operating income each year for five years as follows: $ 3,700,000 1,720,000 1,980,000 Sales Variable expenses Contribution margin Fixed expenses Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income $ 730,000 760.000 1,490,000 $ 490,000 Click here to view Exhibit 14B-1 and Exhibit 148 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? 4-6. Would Casey be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Reg 4 Req 40 What is the project's net present value? (Round your final answer to the nearest whole dollar amount) Netprosent value $ 100.000 Reg2 Reg 1 Reg 2 Reg 3 Reg 4 Reg 4B What is the project's Internal rate of return? (Round your answer to the nearest whole percentage, le. 0.123 should be considered as 12%.) Internal rate of return Reg 1 Reg 2 Reg 3 Req 4A Reg 4B What is the project's simple rate of return? (Round your answer to 1 decimal place.) Simple rate of return Reg 2 Req4A > Step by Step Solution
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