A construction company is evaluating a real estate development project:

Initial Investment: $2,000,000

Net Cash Inflows:

• Year 1: $400,000
• Year 2: $500,000
• Year 3: $600,000
• Year 4: $700,000
• Year 5: $800,000

Discount Rate: 10%

Requirements:

1. Calculate the Payback Period.
2. Determine the NPV.
3. Compute the IRR.
4. Assess the profitability index.
5. Conduct a sensitivity analysis with a 3% increase in the discount rate.