The Board of Grudgework Holdings has received a presentation supporting a $600,000 capital investment. The calculations for accounting rate of OA return, payback, and discounted cash flows are shown below.

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Accounting Rate of Return Initial investment Depreciation @ 20% Book value at year-end Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 $600,000 0 $120,000 $120,000 $120,000 $120,000 $120,000 480,000 360,000 240,000 120,000 150,000 250,000 200,000 150,000 100,000 Cash flows Profit ARR 30,000 6.3% 130,000 36.1% 80,000 30,000 (20,000) 33.3% 25.0% Average profits $ 50,000 Average investment 300,000 Average ARR 16.7% Payback Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Initial investment $(600,000) Cash flows $150,000 $250,000 $200,000 $150,000 $100,000 Cumulative cash flow 150,000 400,000 600,000 Payback = 3 years Net Present Value Year 0 Cash flows $(600,000) Year I $150,000 Year 2 Year 3 Year 4 Year 5 $250,000 $200,000 $150,000 $100,000 Net present value @ 8% $90,303 What issues would you draw to the attention of the board in considering these figures?