Netflix is considering a $1,200,000 investment in new content. The financial projections are:

• Initial Investment: $1,200,000
• Depreciation @ 15%: $180,000/year
• Book Values at Year-End: $1,020,000, $840,000, $660,000, $480,000, $300,000, $120,000, $0
• Cash Flows: $300,000, $350,000, $300,000, $200,000, $150,000, $100,000, $50,000
• Profits: $120,000, $150,000, $120,000, $60,000, $30,000, $0, $-30,000
• ARR: 10%, 12.5%, 10%, 5%, 2.5%, 0%, -2.5%
• Average Profits: $65,000
• Average Investment: $600,000
• Average ARR: 10.83%
• Payback: 4.2 years
• NPV @ 10%: $90,000

Requirements:

1. Calculate ARR, payback period, and NPV.
2. Discuss the investment's profitability.

Provide a recommendation.