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Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely...

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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 20% each of the last three years. Casey is considering a capital budgeting project that would require a $3,600,000 investment in equipment with a useful life of five years and no salvage value. Pigeon Company's discount rate is 16%. The project would provide net operating income each year for five years as follows: Sales Variable expenses $3,500,000 1,640,000 Contribution margin Fixed expenses 1,860,000 Advertising, salaries, and other fixed out-of-pocket costs Depreciation $710,000 720,000 Total foxed expenses 1,430,000 Net operating income $ 430,000 Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables. Required: 1. What is the project's net present value? (Round discount factor(s) to 3 decimal places.) t present value 2. What is the project's intemal rate of return to the nearest whole percent? I rate of return

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