BAM Co. is evaluating a project requiring a capital expenditure of $806,250. The project has an estimated life of 4 years and no salvage value. The net cash flow from the project is as follows:

YearNet Cash Flow

1$285,000

2290,000

3190,000

4125,000

$890,000

The company's minimum desired rate of return is 12%.

1. Determine the average rate of return on the investment.
2. Use the formula that you were given in class to determine the present value factor of $1.00 at 12% for each of the4years.SHOW THE FORMULA AND PLACE THESE NUMBERS IN A CHART.
3. Determine and showthe net present value for the 4 years, adding these numbers to the previously created chart.
4. Should the BAM CEO do this deal?Why/why not?