une Co. is evaluating a project requiring a capital expenditure of $620,000. The project has an estimated life of four years and no salvage value. The estimated net income and net cash flow from the project are as follows:

Year Net Income Net Cash Flow 1 $45,000 $200,000 2 85,000 240,000 3 5,000 160,000 4 15,000 170,000 $150,000 $770,000

The company's minimum desired rate of return is 12%. The present value of $1 at compound interest of 12% for 1, 2, 3, and 4 years is 0.893, 0.797, 0.712, and 0.636, respectively.

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

%

b.Determine the net present value.

$