Halp Save & Exit Submit 1 13 points 2034630 Exercise 14-9 (Algo) Net Present Value Analysis and Simple Rate of Return (LO14-2, LO14-6] Derrick Iverson is a divisional manager for Holston Company. His annual pay raises are largely determined by his division's return on investment (RO), which has been above 25% each of the last three years. Derrick is considering a capital budgeting project that would require a $5,170,000 investment in equipment with a useful life of five years and no salvage value. Holston Company's discount rate is 19%. The project would provide net operating income each year for five years as follows: Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation $ 4,500,000 2,000,000 2,500,000 $780,000 1,034,000 1,814,000 1686,000 eBook References Total fixed expenses Net operating income Click here to view Exhibit 148-1 and Exhibit 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 be inclined to pursue this investment opportunity? Complete this question by entering your answers in the tabs below. Req 1 Req2 Req 3A Rea 38 Compute the project's net present value. (Round your final answer to the nearest whole dollar amount.) Net present value eBook References 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 3A Req 30 Compute the project's net present value. (Round your final answer to the nearest whole dollar amount.). Net present value eBook References 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 Req 3A Req 38 Compute the project's simple rate of return. (Round your answer to 1 decimal place Le. 0.123 should be considered as 12.3%) Simple rate of return Req3A > Prev 13 of 22 Next > eBook References Required: 1. Compute the project's net present value. 2. Compute the project's simple rate of return. 30. 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 Req 3A Req 38 Would the company want Derrick to pursue this investment opportunity? Yes ONO unk factor(s) using tables eBook References 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 Req 3A Req 381 Would Derrick be inclined to pursue this investment opportunity? Yes ONO