Chevron is evaluating a $3,500,000 capital investment. The financial details include an initial investment of $3,500,000 and an annual depreciation rate of 20%, resulting in yearly depreciation of $700,000. The book values at the end of each year decrease progressively from $2,800,000 to $0 over five years. The projected cash flows are $1,000,000, $1,100,000, $900,000, $800,000, and $600,000. The corresponding profits are $300,000, $400,000, $200,000, $100,000, and $0, leading to ARR percentages ranging from 8.57% to 0%. The average profits are $200,000, the average investment is $1,750,000, and the average ARR is 11.43%. The payback period is calculated to be 3.7 years, and the NPV at an 8% discount rate is $300,000.

Requirements:

1. Compute the ARR, payback period, and NPV.
2. Analyze the investment's profitability.

Make a recommendation on whether Chevron should proceed with the investment.