10.00 points Derrick Iverson is a divisional manager for Holston Company. His annual pay raises are largely determined by his division's retum on investment (ROI), which has been above 25% each of the last three years. Derrick is considering a capital budgeting project that would require a $5,150,000 Investment in equipment with a useful life of five years and no salvage value. Holston Company's discount rate is 17%. The project would provide net operating income each year for five years as follows: Sales Variable expenses $4,300,000 1,900,000 2.400,000 Contribution margin Faced expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation $765.000 765.000 Total fixed expenses 1,530,000 Net operating income $ 870,000 Click here to view Exhibit 118.1 and Exhibit 11B-2. to determine the appropriate discount factor(s) using tables. Required: 1. Compute the project's not present value. (Use the appropriate table to determine the discount factors), intermediate calculations and final answer to the nearest dollar amount.) Net present value 2. Compute the project's simple rate of return. (Round your answer to 1 decimal place. I.. 0.123 should be considered as 12.3%) Simple rate of return % EXHIBIT 110-1 Present Value of $l: Periods 2 0 5 4% 5% 6% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 0.062 0.952 0.943 0.935 0.926 0917 0900 0.901 0.893 0.85 0.877 0.870 0662 O 855 0.847 0 840 0 20% 21% 22 23 24 25 .925 0.907 0 890 0.873 0.857 0.842 0.826 0.812 0.797 0.783 0.769 0.750 0.743 0.731 0.718 0.706 0.604 063 0.672 0661 0 650 0540 3 025 020 0813 O OBO 0.889 0.864 0.840 0.816 0.704 0.772 0.751 0.731 0.712 0.603 0.675 0.855 0.823 0.658 0.641 0.624 0.500 0.503 0.579 0.564 0551 05.17 054 0512 0.792 0.783 0.735 0.708 0.683 0.659 0.636 0.613 0.822 0.592 0.784 0.747 0.572 0.552 0.534 0.516 0.713 0.681 0.650 0.621 0 593 0.499 0.482 0.467 0.451 0.437 0.423 0.410 0.567 0.543 0.519 0.497 0.475 0.456 0.437 0.419 0.402 0.386 0.370 0.355 0.790 0.341 0.328 0.746 0.705 0.666 0.630 0.506 0.584 0.535 0.507 0.400 0.456 0.412 0.410 0.750 0.300 0.370 0.352 0.711 0.665 0.335 0.310 0.623 0.583 0.547 0.513 0.303 0.299 0.275 0262 0.482 0.452 0.425 0.400 0.378 0.354 0.333 0.314 0.731 0.677 0.296 0.279 0.263 0.627 0.582 0.540 0.502 0.249 0235 0 222 0.210 0.467 0.434 0.404 0.376 0351 0.27 0.305 0.285 0.250 0.249 0233 0218 0.204 0.191 0.17 0.703 0.545 0.592 0.544 0.500 0.168 0.460 0.424 0.301 0.361 0.333 0.308 0.284 0.263 0.243 0.225 0.200 0.194 0.180 0.167 0.155 0.144 0.134 0.678 0.614 0.558 0.508 0.463 0.422 0.386 0.352 0.322 0.295 0 270 0.247 0.227 0.208 0.191 0.176 0.162 0.140 0.137 0.125 0.116 0.107 0.650 0.585 0.527 0.475 0.429 0.388 0.350 0.317 0.287 0.261 0.237 0.215 0.195 0.178 0.162 0.148 0.135 0.123 0.112 0.103 0,004 0.006 0.625 0.557 0.497 0.444 0.307 0.356 0.319 0.286 0.257 0231 0.208 0.187 .16 0.152 0.137 0.124 0.112 0.102 0.092 0.083 0.078 0.059 0.601 0530 0.489 0.415 0.368 0.325 0.200 0.250 0.20 0.204 0.182 0.16 0.145 0.130 0.116 0.104 0.003 0.014 0.075 0068 0.081 0.055 0.577 0.505 0.442 0.38 0.20 0.200 0.263 0.22 0.205 0.181 0.160 0.141 0.125 0.111 0.000 0.008 0.078 0.000 0.062 0.055 0.049 0.044 0.555 0.481 0.417 0.362 0.315 0.275 0.230 0.200 0.183 0.160 0.140 0.123 0.108 0.005 0.014 0.074 0.065 0.057 0051 0045 0.040 0.035 0.524 0.45 0.304 0.30 0.292 0.22 0218 0.18 0.16 0.141 0.123 0.107 0.003 0.081 0.071 0.002 0.054 0047 0.042 0.03 0. 02 0.028 0.513 0.41 0.371 0.317 0.270 0.231 0.19 0.170 0.146 0.125 0.108 0.003 0.00 0.00 0.00 0.052 0045 0.0100014 0000 0.025 0.023 0.4040416 0.350 0.206 0.250 0.212 0.180 0.153 0.130 0.11 0.005 0.081 0.060 0.050 0.051 0.044 0.008 0.022 0.000 0.024 0.021 0018 0.475 0.306 0.331 0.277 0.232 0.194 0.164 0.138 0.116 0.008 0.083 0.070 0.000 0.05 0.043 0.037 0.001 0.027 0.023 0.00 0.017 0.014 0.456 0.377 0.312 0.250 0.215 0.178 0.140 0.124 0.104 0.007 0.073 0.061 0.051 0.043 0.037 0.031 0.020 0.022 0.019 0.018 0.014 0.012 0.430 0.250 0.2040.242 0.100 0.164 0.135 0.112 0.000 0.077 0064 0.053 0.044 0.007 0.031 0.00 0.002 0.018 0015 0013 0.0110.000 0.228 0.068 0.184 0.150 0.123 0.101 0.003 0.056 0.040 0.030 0.018 0.015 0013 0.011 0.000 0.007 0.422 0.342 0.278 0.032 0.026 0,022 0.060 0.049 0.040 0.033 0.015 0.138 0.027 0.022 0.018 0,012 0.010 0.000 0.007 0.006 0.112 0.001 0.074 0.406 0.326 0.22 0.211 0.170 0.015 0.013 0.010 0.008 0.007 0.000 0.005 0.390 0.310 0.247 0.023 0.010 0.197 0.158 0.035 0.020 0.125 0.102 0.082 0.003 0.053 0.043 0.016 0.013 0.010 0.000 0.007 0.005 0.005 0.004 0.233 0.184 0.375 0.295 0.146 0.050 0.116 0.047 0.038 0.030 0.024 0.020 0.092 0.074 0.361 0.21 0.220 0.172 0.135 0.106 0.084 0.066 0.053 0.042 0.033 0.025 0.021 0.017 0.014 0.011 0.000 0.007 0.005 0.005 0.004 0.003 0.004 0.003 0.002 0.014 0.011 0.000 0.007 0.008 0.005 0.161 0.125 0.076 0.037 0.008 0.00 0.047 0.029 0,023 0.018 0.347 0.268 0.207 0.000 0.002 0.00 0.005 0.004 0.003 0.012 0.010 0.00 0.054 0.042 0.033 0.025 0.020 0.016 0.333 0.265 0.116 0.000 0.000 0.100.150 0.185 0.321 0.243 0.141 0.107 0. 02 0.063 0.048 0.037 0.029 0.022 0.017 0.014 0.011 0.008 0.008 0.005 0.004 0.003 0.002 0.002 0.002 0.075 0.057 0.044 0.033 0.026 0,012 0.000 0.007 0.005 0.004 0.003 0.003 0.002 0.002 0.001 0.020 0,015 0.131 0.000 0.308 0.231 0.174 0.208 0.142 0.007 0.067 0.046 0.032 0.022 0.015 0.011 0.008 0.005 0.004 0.003 0.002 0.001 0.001 0.001 0.000 0.000 0.000 0.000 0.000 16 17 18 10 20 21 22 23 24 25 27 29 30 40 EXHIBIT 118-2 Present Value of an Annuity of $1 in Arrears; 11 - Periods 13 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 10% 20% 21% 22% 23% 20% 25% 0.062 0.952 0.043 0.035 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.952 0.855 0 847 0 0 0 0 2 020 013 080 000 1.886 1.859 1.833 1.808. 1.783 1.759 1.736 1.713 1.690 1.668 1.647 1.626 1.605 1.585 1.586 1 547 1.528 1.509 2.775 2.723 2.673 2624 1.482 1474 1457 1.440 2577 2.531 2.487 2.444 2.402 2.361 2322 223 2246 2210 2.174 2140 2 104 2074 2012 2011 1081 1952 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.102 3.037 2074 2014 2.855 2.798 2.743 2.500 2830 2580 2540 2494 248 2404 232 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.605 3.517 3.433 3.352 3.274 3.190 3.127 3.058 2.901 2925 2.864 2.803 2.745 2.689 5.2425.076 4.917 4.767 4.623 4.486 4.355 4 231 4.111 3.908 3.889 3.784 3.685 3.580 3.498 3.410 3.326 3.245 3.167 3002 3.020 2.951 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.712 4 564 4.423 4288 4160 4.039 3.922 3.812 3.706 3.505 3.508 3418 3327 3242 3.161 6.733 6.463 6.210 5.971 5.747 5.535 5.335 5.146 4 968 4.799 4820 4.487 4 344 4.207 4078 3.954 3.837 3.7252519 351B 14213229 7.435 7.108 6.802 6.515 6 247 5.905 5.759 5 537 5328 5.132 4.946 4772 4.807 4.451 4.303 4.163 4001 3.905 3730 3.573 3.560 3.463 8.111 7.7227.360 7.024 6.710 6.418 6.145 5.889 5.650 5.426 5216 5.019 4.833 4.659 4.494 4339 4.192 4.054 3.923 3.790 362 3.571 8.760 8.308 7.887 7.490 7.130 6.805 6.4056207 5.939 5. 67 5.453 5.234 5.0294.836 4.654 4.486 4.227 4.177 4.095 3002 37783656 0.385 8.863 8.384 7,043 7.536 7.161 6.814 6.492 6.104 5.918 5.660 5.421 5.197 4.088 4.793 4.611 4.439 4278 4.127 385 3851 3.725 9088 9.394 8.853 8.358 7.004 7.487 7.103 6.750 6.424 8.122 5.342 5583 5.342 5.118 4.910 4.715 4.533 4.362 4203 4053 3.912 3.780 10.563 0.899 9.295 8.745 8.244 7.786 7.367 6082 6.628 6.302 6.002 5.724 5.468 5.229 5.000 4.802 4.611 4.432 4.265 4.108 3.02 3.524 11.118 10.380 9.712 9.108 8.550 8.061 7.606 7.191 6.811 8.462 6.142 5.847 5.575 5.324 5.092 4.878 4.675 4.489 4.315 4.153 4.001 3.859 11.652 10.838 10.106 9.447 8.851 8.313 7.824 7.370 6.974 6,604 6.265 5.954 5.668 5.405 5.102 4.038 4.730 4.536 4357 4.100 4.033 3.887 12 166 11 274 10.477 9763 0.122 8.544 8022 7549 7.120 6.799 6.373 6.047 5.749 5.475 5.222 4.000 4.775 4.57841014219 4 050 3010 12.650 11.690 10.128 10.050 0.372 3.756 8.201 7.702 7.250 6,840 6.467 8,128 5.818 5.634 5.273 5.033 4.812 4.608 4419 4243 4.000 3.928 13 134 12.085 11.10 10.336 0.604 8.050 8.365 7830 7.366 0.038 6,550 6.108 5.877 5.5645.316 5.0704 143 461 442 423 40973042 13 500 12 462 11.470 10.594 0.818 9.120 8.514 7.003 7.460 7.025 0.023 6259 5.920 5.628 5.353 5.101 4870 4657 4.400 4270 4110 3094 14,020 12.021 11.764 10.836 10.017 0.202 8.649 8,075 7.562 7.102 6,687 6.312 5.073 5.665 5.314 5.127 4.801 4.675 4478 4.292 4.121 3.963 14.451 13.163 12.042 11.061 10.2019.442 8.7728.176 7.645 7.170 6.743 6.350 6,011 5.806 5.410 5.140 4.000 4800 448 4102 4.1303970 7.230 6.792 6.300 6.044 5.723 5.432 5.167 4.095 4.703 4.400 4.311 4.137 3.978 14.857 11,272 10.371 0.580 8.883 8.256 7.718 13.489 12.303 15.247 13.700 12.550 11.460 10.520 0.707 8085 8.348 7.784 7283 6.835 6.434 6.073 5.746 5.451 5.182 4937 4.713 4.507 418 4143 3.081 15.622 14.004 12.783 11.654 10.675 9.823 0.077 8.422 7.843 7.330 6.873 6.464 6,007 5.700 5.467 5.195 4.948 4.721 4.514 4.323 4.147 3.985 4.151 3008 0.929 9.161 8.488 7.806 7372 6.006 6.401 6.118 5.783 5.40 5.200 4.056 4.723 4520 420 15.083 14 375 13.003 11.826 10.810 16.330 14.643 13.211 11.087 10.035 10.027 0.237 8.548 7.943 7409 6.035 6.514 6.136 5.798 5.492 5 215 4014 4.734 4.524 4.32 4.154 3.000 16.663 14.898 13.406 12.137 11,051 10.116 0.307 8.602 7.984 7.441 6,061 6.534 6.152 5.810 5.502 5223 4.070 4.739 4.528 4.335 4.157 3.992 0370 8650 8,022 7.470 6,083 6.551 6.166 5.820 5 510 5229 4 975 4.743 4531 4.337 4.159 3.994 16.984 15.141 13.591 12 278 11.158 10.10 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.604 8.055 7496 7.003 6.566 6.177 5.829 5.517 5.235 4.979 4.746 4.534 4.339 4.160 3.995 10.703 17.150 15.046 13.332 11.025 10.757 0.770 8.051 8.244 7.634 7.105 6.642 6.233 5.871 5.548 5.258 4.907 4.760 4544 4.347 4.166 3.900 16 17 10 20 21 22 23 24 25 40