Problem $12-17($Algo$)$ Net Present Value Analysis; Internal Rate of Return; Simple Rate of Return $[$LO$12-2,$ L$012-3,$ L$012-6]$

Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division's return on investment $($ROI$),$ which has been above $23\%$ each of the last three years. Casey is considering a capital budgeting project that would require a $$5,380,000$ investment in equipment with a useful life of five years and no salvage value. Pigeon Company's discount rate is $19\%.$ The project would provide net operating income each year for five years as follows:

Sales

Variable expenses

Contribution margin

Fixed expenses:

Advertising, salaries, and other fixed out$-$

of$-$pocket costs

Depreciation

Total fixed expenses

Net operating income

$$4,800,000$

$2,160,000$

$2,640,000$

$[$$$840,000],[1,076,000]$

$\backslash$table$[[1,916,000$