BAM Co. is evaluating a project requiring a capital expenditure of $806,250. The project has...
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BAM Co. is evaluating a project requiring a capital expenditure of $806,250. 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: E Net Income Net Cash Flow 1 $75,000 $285,000 2 102,000 290,000 3 109,500 190,000 4 J,M ,M $322,500 $890,000 The company's minimum desired rate of return is 12%. The present value of $1 at compound interest of 12% for Years 1 through 4 is 0.893, 0.797, 0.712, and 0.636, respectively. ) Determine the following: a. The average rate of return on investment, including the effect of depreciation on the investment. :] % b. The net present value. Enter negative values as negative numbers. $:]
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