Newport Department Store is considering development of an e-commerce business. The company estimates that development will require an initial outlay of $1,300,000. Other cash flows will be as follows:
Year 1 ..................($750,000)
Year 2 ...................$221,000
Year 3 ...................$850,000
Year 4 ...................$950,000
Year 5 ...................$940,000
Required
Assuming the company limits its analysis to 5 years, estimate the internal rate of return of the e-commerce business. Should the company develop the e-commerce business if the required rate of return is 14 percent?