e#8Homework Question 1 (or 5) value: 2.00 points Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division's return on invest ment ROI), which has been above22% each of thelast 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 Sales Variable expenses $3,700,000 1,720,000 Contribution margin Fixed expenses 1,980,000 Advertising, salaries, and other fixed out-of-pocket costs Depreciation $730,000 760,000 Total fixed expenses 1,490,000 Net operating income $ 490,000 Click here to view Exhibit 13B-1 and Exhibit 138-2 to determine the appropriate discount factors) using tables. Required 1 What is the project's net present value? (Round discount factor(s) to 3 decimal places.) va 2. What is the project's intenal rate of return to the nearest whole percent? Internal rate of return iisa 5e0