Sommers Company is evaluating a project requiring a capital expenditure of $300,000. The project has an estimated life of 5 years and no salvage value. The estimated net income and net cash flow from the project are as follows:

The company's minimum desired rate of return for net present value analysis is 12%. The present value of $1 at compound interest of 12% is shown in the table below:

a.Determine the average rate of return on investment, giving effect to depreciation on the investment. Round your answer to two decimal places.

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b.Determine the net present value.

Sommers Company is evaluating a project requiring a capital expenditure of $300,000. The project has an estimated life of 5 years and no salvage value. The estimated net income and net cash ow from the project are as follows: E Net Income Net Cash Flow 1 $60,000 $120,000 2 50,000 110,000 3 45,000 105,000 4 30,000 90,000 5 20,000 80,000 $205,000 $505,000 The company's minimum desired rate of return for net present value analysis is 12%. The present value of $1 at compound interest of 12% is shown in the table below: Present Value Year ) of $1 at 12% 0.093 0.797 1 2 3 0.712 4 0.636 5 0.567 a. Determine the average rate of return on investment, giving effect to depreciation on the investment. Round your answer to two decimal places. b. Deten'nine the net present value. $