Company Y is evaluating an investment opportunity with the following information:

• Initial Investment: $4,500,000
• Expected Life: 6 years
• Annual Revenue: $2,000,000
• Annual Operating Expenses: $500,000
• Depreciation: Straight Line
• Residual Value: $500,000
• Cost of Capital: 9%
• Tax Rate: 28%

Requirements:

1. Compute the Annual Net Cash Flows.
2. Calculate the NPV of the project.
3. Determine the IRR of the project.
4. Find the Accounting Rate of Return (ARR).
5. Evaluate the profitability of the project.