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A firm is evaluating a 5-year project with annual cash inflows of $220,000 and cash outflows of $165,000. The initial investment of the project is

A firm is evaluating a 5-year project with annual cash inflows of $220,000 and cash outflows of $165,000. The initial investment of the project is $220,000. a) Calculate the undiscounted payback period of the investment. (2 marks) b) Given the cost of capital for the firm is 8%, calculate the net present value (NPV) for the investment. Should the company invest in this project based on NPV answers? Explain your reason(s). (4 marks)

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