Newport Department Store is considering development of an e-commerce business. The company estimates that development will require an initial outlay of \(\$ 1,200,000\). Other cash flows will be as follows:

Required
Assuming the company limits its analysis to five 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 12 percent?

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Year 1 ($600,000) Year 2 $150,000 Year 3 $620,000 Year 4. $725,000 Year 5 $800,000