A company, which has a tax rate of 25%, is considering investing in an extension of its

main operating line, a project that would require an investment of $1.2 million and would

generate the following net cash flows over the next 4 years:

Year 1: $400,000

Year 2: $550,000

Year 3: $800,000

Year 4: $600,000

The expected rate of return for projects of that nature is 12%, and the company usually likes

to recoup its investment within 3 years.

Assess the financial viability of this investment, and justify your decision.