Exercise 14-9 (Algo) Net Present Value Analysis and Simple Rate Derrick Iverson is a divisional manager for Holston Company. His annual pay raises are largely determined by his divisie investment (ROI), which has been above 20% each of the last three years. Derrick is considering a capital budgeting pro Tequire a $4.160,000 investment in equipment with a useful life of five years and no salvage value. Holston Company's 19%. The project would provide net operating income each year for five years as follows: $3,700,000 1,600,000 2,100,000 ht Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total ved expenses Net operating income $ 710,000 832.000 1,542,000 $ 558,000 rint rences Click here to view Exhibt 148.1 and Exhibk 148.-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 beinclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A Reg 38 Compute the project's not present value. (Round your tinat answer to the nearest whole dollar amount.) Netrennt value Reg 2 >