This question is from chapter 12 of Managerial Accounting 16^th edition by Ray Garrison.

Problem 13-17 Net Present Value Analysis; Internal Rate of Return; Simple Rate of Return [LO13-2, LO13-3, LO13-6] 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 24% each of the last three years. Casey is considering a capital budgeting project that would require a $6,100,000 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 Fixed expenses: $ 5,400,000 2,400,000 ,000,000 Advertising, salaries, and other fixed out-of-pocket costs Depreciation 900,000 1,220,000 Total fixed expenses 2,120,000 $ 880,000 Net operating income Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables