Saved 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 25% each of the last three years. Derrick is considering a capital budgeting project that would require a $4,900,000 investment in equipment with a useful life of five years and no salvage value. Holston Company's discount rate is 18%. The project would provide net operating income each year for five years as follows: sales variable expenses Contribution margin Fixed expenses: of-pocket costs Depreciation $ 4,200,000 1,850,000 2,350,000 Advertising, salaries, and other fixed out- $ 755,000 980,000 Total fixed expenses 1,735,000 $ 615,000 Net operating income Click here to view Exhibit 12B-1 and Exhibit 128-2 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? Complete this question by entering your answers in the tabs below. Sales variable expenses Contribution margin Fixed expenses Advertising, salaries, and other fixed out of pocket costs Depreciation 4 Total fixed expenses $755,000 900,000 1,715,000 $ 615,000 Click here to view Exhibit 128-1 and Exhibit 128-2 to determine the appropriate discount factoris) 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? Complete this question by entering your answers in the tabs below. Req Reg 2 Req 38 Compute the project's net present value. (Round your final answer to the nearest whole dollar amount.) Req2> of pocket costs Depreciation Total fixed expenses Net operating income $755,000 1,735,000 $ 615,000 Click here to view Exhibit 12B-1 and Exhibit 128-2, to determine the appropriate discount factoris) 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? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Reg A Req 30 Compute the project's simple rate of return. (Round your answer to 1 decimal place 1 0.123 should be considered as 12.3%) mpre rate of re Contribution margin Fixed expenses: Advertising, salaries, and other fixed out- of-pocket costs Depreciation Total fixed expenses Net operating income $ 755,000 980,000 3,350,000 1,735,000 $ 615,000 Click here to view Exhibit 128-1 and Exhibit 128-2 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? Complete this question by entering your answers in the tabs below. Req 1 2 Req 3A Req 30 Would the company want Derrick to pursue this investment opportunity? Yes No 14 & UNIONA Manager for Holton Company. His annual pay raises are largely determined by his division's return on Investment (ROI), which has been above 25% each of the last three years. Derrick is considering a capital budgeting project that would require a $4,900,000 investment in equipment with a useful life of five years and no salvage value. Holston Company's discount rate is 18%. The project would provide net operating income each year for five years as follows sales Variable expenses $4,200,000 2,350,000 Contribution wirgin ixed expenses Advertising, salaries, and other fixed out- of pocket costs Depreciation Total fixed expenses wet operating income $755,000 00,000 1,715,000 $615,000 Click here to view Exhibit 128-1 and Exhibit 128-2. 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. 30. Would the company went 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. Req 3A Req 38 Would Derrick be inclined to pursue this investment opportunity? Oyes