Question: #10 5 questions in one please help Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his

#10 5 questions in one please help
#10 5 questions in one 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 (ROI), which has been above 24% each
of the last three years. Casey is considering a capital budgeting project
that would require a $4,450,000 investment in equipment with a useful life
of five years and no salvage value. Pigeon Company's discount rate is

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 $4,450,000 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: $ 4,300,000 1,960,000 2,340,000 Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income $ 790,000 890,000 1,680,000 $ 660,000 Click here to view Exhibit 128-1 and Exhibit 128-2. 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? 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. Req 1 Reg 2 Req3 Req 4A Req 4B What is the project's net present value? (Round your final answer to the nearest whole dollar amount.) Net present value Req 1 Reg 2 Reg 3 Req 4A Req 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 retum % Req 1 Reg 2 Req3 Req 4A Req 4B What is the project's simple rate of return? (Round your answer to 1 decimal place.) Simple rate of return % Req 1 Req 2 Reg 3 Req 4A Req 4B Would the company want Casey to pursue this investment opportunity? Yes 10 No Reg 1 Req 2 Req3 Req 4A Req 4B Would Casey be inclined to pursue this investment opportunity? Yes No

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