Tesla is evaluating a $2,500,000 capital investment. The financial details include an initial investment of $2,500,000 and an annual depreciation rate of 20%, resulting in yearly depreciation of $500,000. The book values at the end of each year decrease progressively from $2,000,000 to $0 over five years. The projected cash flows are $700,000, $800,000, $600,000, $500,000, and $400,000. The corresponding profits are $200,000, $300,000, $100,000, $0, and $-100,000, leading to ARR percentages ranging from 8% to -4%. The average profits are $100,000, the average investment is $1,250,000, and the average ARR is 8%. The payback period is calculated to be 4 years, and the NPV at an 8% discount rate is $180,000.

Requirements:

1. Compute the ARR, payback period, and NPV.
2. Analyze the investment's profitability.
3. Make a recommendation on whether Tesla should proceed with the investment.