Jasso Co. manufactures motorized wheelchairs. The company is considering an expansion. The plan calls for a construction cost of \(\$ 5,200,000\). The expansion will generate annual net cash inflows of \(\$ 700,000\) for 10 years.

Engineers estimate that the new facilities will remain useful for 10 years and have a residual value of \(\$ 500,000\). The company uses straight-line depreciation, and its stockholders demand an annual return of \(10 \%\) on investments of this nature.

Requirements 

1. Compute the payback period, the accounting rate of return, and the net present value of this investment.

2. Make a recommendation whether the company should invest in this project.